Millions of French households have been hit hard by the horrific cost of living crisis and soaring price increases that are sweeping across Europe and causing hardship for some of the continent’s largest economies. But the situation worsened in France of inflation jumping again in July, to 6.1 percent from 5.8 percent in June, according to the Paris-based National Institute of Statistics and Economic Studies (INSEE).
The French National Statistical Office attributed this increase to “an acceleration in the prices of summer-related services, food and – to a lesser extent – industrial products”.
On an annual basis, food prices shot up 6.7 percent from 5.8 percent a month earlier.
Prices of manufactured goods rose 2.7 percent year-on-year from 2.5 percent earlier, while prices for services rose from 3.3 percent to 3.9 percent year-on-year.
But a positive sign was that energy prices fell “strongly” in July – now just 28.7 percent higher than a year earlier, compared to 33.1 percent in June.
This drop is attributed to “petroleum product prices”, which have gradually fallen in France this month.
Despite this, experts have warned that overall daily prices are likely to continue to rise, at least in the coming months.
INSEE stated in its most recent economic report at the end of June that prices are expected to continue to rise to “just under seven percent in September” on an annual basis.
After that, inflation is expected to stabilize and fall slightly to 5.5 this year, compared to just 1.6 percent in 2021, the experts said.
READ MORE: Ukraine LIVE: Putin ‘gets desperate’
However, according to the latest figures from Eurostat, inflation in France is still much lower than in some of the European Union’s neighboring countries.
Belgium has seen inflation rise to 10.5 percent year on year, with 10 percent in Spain, 8.7 percent in Austria, 8.5 percent in Italy and 8.2 percent in Germany.
There is also now particular concern about Germany – home to the EU’s largest economy – bracing itself for a chronic gas shortage heading into the winter months, over fears that Russia will cut off supplies through the Nord Stream 1 pipeline completely.
Overall, the eurozone economy grew much faster than expected in the second quarter of this year, but economists continued to warn of the possibility of a mild recession due to increasingly high inflation and supply chain problems in the second half of this year. year.
Eurozone GDP rose 0.7 percent quarter-over-quarter in April-June for a year-over-year gain of 4.0% — better than expectations of a quarter-on-quarter gain of 0.2 percent and 3. .4 percent on an annual basis.
Inflation in the 19 countries that share the euro rose in July from 8.6 percent a month earlier to 8.9 percent.
ING economist Bert Colijn warned Europeans to expect a “mild recession from the second half of the year”.
He said: “The acceleration in economic growth is mainly due to reopening effects and masks underlying weakness due to high inflation and manufacturing difficulties.
“As of now, we expect GDP to continue on a downward trend as the recovery from the services reopening weakens, global demand wanes and purchasing power persists.
“We expect this to result in a mild recession from the second half of the year.”
Additional reporting by Maria Ortega.