Inflation: food prices will (almost) no longer increase by the end of the year, predicts INSEE

For consumers, the outlook for food prices is finally clearing up. After experiencing their first monthly decline (-0.3%) in almost two years in September, they should remain “generally almost stable” until the end of the year, predicts INSEE in its latest economic report. , published this Thursday. “For the rest of the year, we expect food prices to be stable or almost stable in monthly variations,” explained Julien Pouget, head of the economics department at INSEE, during a press conference. This is a clear inflection compared to the start of 2023, where monthly variations were more around 1.7-1.8%.

As a result, year-on-year, food prices “would continue to slow down sharply since September,” said his colleague Olivier Simon, head of the economic summary division. According to INSEE, food inflation would thus fall to around 7% in December (after 9.6% in September), i.e. a level more than half as high as at its peak last March (15.9%). . Overall inflation would amount to 4.4% over one year in December. “In fact, food prices have slowed down sharply since the spring and even fell on average over a month in September, particularly those of products excluding fresh produce, in connection with the recent turnaround in producer prices of the agri-food industries and even more so of agricultural producer prices,” notes the statistical institute.

For INSEE, these forecasts are not immune to being affected by certain hazards. Julien Pouget cites, concerning food prices, commercial negotiations between producers and distributors. However, nothing should really change before the next session of annual negotiations, which the government wants to move forward. A bill to set their deadline in mid-January - instead of March - was adopted Monday in the National Assembly. He must arrive in public session in the Senate on October 26, for publication of the text hoped by the executive for mid-November.

Coupled with a “more dynamic” purchasing power (1.2% in 2023), this slowdown in food prices on shelves should have an impact on consumption, notes INSEE. And remove the specter of sustainable deconsumption. Overall, consumption should have rebounded in the third quarter (0.4%), driven by the consumption of goods, and continue to progress at the end of the year, although more moderately (0.2%). “In particular, purchases of goods, and in particular food products, should increase again” in the fourth quarter, estimates INSEE.

Moreover, on household eating habits, the institute notes that “the share of households declaring that they have changed their eating habits due to inflation (...) stopped increasing in September”. A positive signal, which should not disguise the fact that the proportion of French people forced to change their behavior remains very high (47%). In September, more households even said they had reduced the quantities consumed (17%, compared to 14% in June).