French inflation at 27-month high of 2.8% in May, but below forecast
French Inflation Rises in May 2024
Overview of Inflation Data
May 29 (Reuters) - French inflation rose in May at the fastest pace in more than two years on surging energy prices, though slightly less than expected, preliminary data from statistics agency INSEE showed on Friday.
Monthly and Annual Inflation Rates
• Consumer prices rose 0.1% from April, pushing the 12-month inflation rate to 2.8%, the highest since February 2024 and up from 2.5% in April.
Harmonised Rate and Analyst Expectations
• The harmonised rate, adjusted for comparison with other euro zone countries, came in slightly short of a Reuters poll of 19 analysts' expectations, which had a median forecast of 2.9% and a range of 2.3% to 3.1%.
Drivers and Details of Inflation
Energy Prices as Main Driver
• The May increase was driven by a nearly 17% jump year on year in energy prices, particularly natural gas, the statistics office said.
Impact of Energy Costs on Other Prices
• However, there was little sign that energy costs, which have climbed sharply since the start of the Iran war, were feeding through into other prices.
Services and Manufactured Goods Inflation
• Services inflation edged up to 2% from 1.9% in April, while prices for manufactured goods fell for a second straight month, down 0.6%.
Reporting Credits
(Reporting by Hugo Lhomedet in Gdansk and Leigh Thomas in Paris. Editing by Milla Nissi-Prussak and Mark Potter)
