Inflation in December: A Stable 1.3% Increase Year-on-Year

According to INSEE, consumer prices in France rose by 1.3% in December year-on-year, maintaining the same level as in November. On average, inflation for the entire year 2024 stood at 2%.

Contrasting Trends Across Product Categories

In December, energy prices experienced a slight rebound, offset by a continued decline in the prices of manufactured goods and stagnant food prices, according to INSEE’s provisional estimates.

Services as the Main Driver of Inflation

Services, which account for more than half of household consumption, recorded an annual increase of 2.3%, the same rate as in November. Tobacco prices also saw a significant rise, climbing by 8.7% year-on-year.

Month-on-month, consumer prices rose by 0.2% in December, following a 0.1% decline in November. This increase is attributed to higher prices for services, particularly transportation, and petroleum products.

European Comparison: Slight Acceleration

The Harmonized Index of Consumer Prices (HICP), used to compare inflation rates across European countries, rose by 1.8% year-on-year in December, compared to 1.7% in November. Month-on-month, this index recorded a 0.2% increase, after a 0.1% decrease in the previous month.

Outlook for 2025

INSEE predicts a challenging start to 2025 for the French economy, describing the beginning of the year as “gloomy” amid a government-announced €50 billion budgetary effort. Inflation is expected to continue declining, potentially reaching around 1% by June.