Inflationary pressures will accelerate in France
Wednesday, February 15, 2023
Significance
France had one of the lowest inflation rates in Europe in 2022, partly due to government policies designed to assist President Emmanuel Macron's re-election. However, core inflation is now above 5%, portending problems in reducing inflation to the 2% medium-term target.
Impacts
- France is more protected from global energy prices; their decline may not have much of a downward impact on French inflation.
- January’s PMI shows that business confidence remains weak, falling for the third consecutive month and remaining below 50 points.
- The macroeconomic impact of the pension strikes and protests will likely be limited to the tourism and transport sectors.
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