France’s annual CPI inflation accelerates 0.4 pct in September

France’s consumer price index dropped in September on sequential basis after rising in the prior month. According to the official statistics office, INSEE, the CPI inflation dipped 0.2 percent after rising 0.3 percent in August. Seasonally adjusted, CPI rose 0.1 percent. On a year-on-year basis, the CPI inflation accelerated 0.4 percent, confirming the flash reading, as compared with the 0.2 percent rise seen in August.

The sequential fall was mainly due to the seasonal decline in tourism-related services prices after the summer school holiday period. Furthermore, food prices declined, particularly fresh foodstuffs prices. Moreover, a recovery in prices of petroleum product after two months of drop, and an additional increase in manufactured products prices mitigated the overall fall, stated INSEE.

Meanwhile, the year-on-year rise in inflation was driven by the rise in services cost, which rose 1.2 percent. Package holiday prices rose 2.3 percent year-on-year, whereas airfares dropped 5.1 percent.

On sequential basis, food prices dropped 0.5 percent in September after rising 0.2 percent in the prior month. Excluding fresh products, prices of food dropped 0.2 percent, owing to dairy products and meat. On an annual basis, food prices remained stable.

In the meantime, energy prices recovered in September by rising 0.8 percent after declining for two straight months. But they continued to stay lower at -1.1 percent on a year-on-year basis. The sequential rise in energy prices was driven by increase in prices of petroleum product prices.

Core inflation rose 0.2 percent in September after stabilizing in August. On an annual basis, core inflation accelerated to 0.7 percent from 0.4 percent in August, returning to the June 2016 level. Meanwhile, the Harmonised Index of Consumer Prices dropped by 0.2 percent sequentially and rose 0.5 percent year-on-year.