French inflation slows to 0.6% in May, lowest since 2020

(Reuters) -French inflation fell to its lowest level since December 2020 in May, driven by a sharper decline in energy prices and a slowdown in service costs, preliminary data from statistics agency INSEE showed on Tuesday.

France's harmonized consumer prices, adjusted for comparison with other euro zone countries, increased 0.6% year-on-year in May, down from a 0.9% rise in April.

A Reuters poll of 21 analysts had on average expected an inflation rate of 0.9%, with estimates ranging from 0.7% to 0.9%.

The slowdown marked the lowest inflation rate yet this year and the lowest for France since December 2020 when prices were flat.

Service prices rose 2.1% on the year in May, slowing from 2.4% in April. INSEE attributed this to slower growth in transport prices and a more pronounced decline in communication costs.

Energy prices fell 8.1% compared with May 2024, steeper than April's 7.8% drop and the fourth consecutive monthly decline, as gas prices continued to fall.

Food prices rose 1.3% year-on-year, a slight acceleration from 1.2% in April, while prices of manufactured goods remained in a negative territory at -0.2%, unchanged from the previous month. Tobacco price inflation held steady at 4.1%.

Inflation measured by France's own consumer price index rose 0.7% over the year through May, down from 0.8% in April.

(Reporting by Gianluca Lo Nostro, Olivier Cherfan in Gdansk; Editing by Milla Nissi-Prussak)