2023-08-31 16:02:16
This is a bad signal for the government: inflation rebounded in August, according to provisional figures published on Thursday by INSEE. The consumer price index increased by 4.8% over one year (+5.7% with the HICP index which allows European comparisons).
We are far from the 6% at the start of the year. But it is a break with the marked deceleration of the past three months. In July, tricolor inflation had fallen to 4.3%.
Politically, this inversion of the curve falls badly. For months, the Minister of the Economy has been ostensibly putting pressure on manufacturers and distributors to lower prices and restore purchasing power to households. Is it a coincidence? It was precisely this Thursday that Bruno Le Maire announced the signing of an agreement to “definitively break the spiral of food prices”, relating in particular to the stability – or even the reduction – of labels for 5,000 references. “That’s a quarter of the references in a supermarket, that’s already not bad,” pleaded the minister on France 2.
Electrical shock
The French may have another reason for relief: the rebound in August should be temporary. “It is essentially linked to the phasing out of the tariff shield on energy. All the other components of inflation continue to decelerate,” underlines Eric Heyer, economist at the OFCE. The 10% revaluation of electricity prices from August 1, combined with the rise in fuel prices, caused energy prices to jump by 6.8% over one year (compared to -3.7% in July).
Apart from this shock, prices remain at very high levels but stop soaring. “Food prices rose sharply until last April. Since then, they have stabilized and should not increase once more. It is even possible that we are witnessing a small drop, depending on the negotiations, ”analyzes Stéphane Colliac, economist at BNP Paribas.
This is the whole objective of Bruno Le Maire, who publicly congratulated Barilla or the Avril group for the drop in the price of pasta and oil. “Given the lull in industrial production prices, in France as in Europe or China, the inflation of manufactured goods is rather behind us too,” adds Stéphane Colliac.
Soaring wages
The economist does not anticipate a new rebound in inflation by the end of the year. “The question will arise in February and August whether regulated electricity prices will rise once more,” he nevertheless warns. This is likely, given the government’s budgetary objectives of getting closer to market tariffs. But that would make inflation more durable and probably prevent it from falling below 2% next year”.
Especially since another factor might prevent tricolor inflation from returning quietly to its box: the soaring pay slips. “Structurally, inflation was until now very exogenous, because it was linked to energy prices and then to food prices. It is becoming more and more endogenous, with the rise in wages which has caught up with inflation and might fuel it in the future”, warns Eric Heyer. A Deloitte survey published Thursday anticipates further marked increases in 2024 in companies.
The next “social conference” on wages, agreed by Emmanuel Macron at the end of the “Saint-Denis Meetings” on Wednesday, will therefore be scrutinized by economists and the European Central Bank, at least as much as by unions and employees. .
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