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Inflation in France is rising rapidly and reached 4.5% year on year in March, according to INSEE estimates

Inflation in France clearly crossed 4% over one year in March, according to an initial estimate published Thursday, March 31 by the National Institute of Statistics and Economic Studies (Insee). After reaching 3.6% over one year in February, the increase in the consumer price index stood at 4.5% in March.

This rise in inflation will lead to an automatic increase in the minimum wage in May, between 2.4% and 2.6%, according to an estimate by the Ministry of Labor. The exact rate will be known on April 15 when INSEE publishes its final estimate of the rise in prices in March.

Evolution of the consumer price index (CPI), the instrument used to measure inflation.

The forecasts published Thursday are in line with the expectations of INSEE, which expected, from mid-March in its monthly economic note, that inflation would pass the 4% mark in March and evolve around 4, 5% in the second trimester.

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Energy prices continue to soar

In addition to the rise in the price of petroleum products, linked in particular to the war in Ukraine, INSEE has observed a marked increase in the price of manufactured products and food. “Over one month, consumer prices should increase by 1.4%, after +0.8% in February”notes the institute.

Energy prices continue to soar and are up 28.9% compared to March 2021. The cost of services is increasing much more modestly, at 2.3% over one year, while that of tobacco is falling slightly by 0.1%.

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Household consumption, on the other hand, “slightly” recovered in February, by 0.8%, reported INSEE, which also revised down to −2% the contraction observed in January.

February’s increase “is driven by the sharp rebound in consumption of manufactured goods”which increased by 2.2%, after − 2.9% in January, specified the National Institute of Statistics.

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