French consumption likely eased in March, flash HICP inflation to have remained stable in April

In February, consumption in France grew strongly by 0.6% m/m after increasing 1% m/m in the prior month. However, some of the gain is expected to have been reversed last month. Consumption is likely to have declined 0.4% m/m in March, according to Societe Generale.

Consumption is expected to have grown strongly by 1.6% q/q in Q1 2016. Admittedly, low inflation and a gradual rebound in the job market have stimulated household consumption, which is expected to have primarily driven economic growth in Q1, said Societe Generale.

Meanwhile, France’s flash HICP inflation for April is expected to have remained stable at -0.1% y/y, noted Societe Generale. The CPI figure is also likely to have stayed at -0.1% y/y.  Food and energy prices are expected to have been stable on an annual basis, driven by slightly monthly rises in April. Recovery in services inflation and stable non-energy industrial goods prices are expected to have kept core inflation unchanged in April.

“French HICP inflation is set to average 0.4% in 2016 and 1.7% in 2017. We expect the core metric to be 0.9% in 2016 before rising to 1.3% in 2017”, added Societe Generale.