Monthly change: +0.2% in January; One-year variation: +1.7% In January 2025, the CPI increases by 0.2% over a one-month period, as in December. This price increase is explained by higher prices for services (+0.3% after +0.5%), especially health services (+2.4% after +0.4%) and social protection (+2.8% after stability), as well as energy (+1.6% after +0.7%), especially petroleum products (+2.8% after +1.0%) and gas (+2.5% after +1.5%).
Food prices increased by (+0.3% after -0.1%). Tobacco prices also rose over the month (+3.8% after stabilizing in December). Conversely, prices of manufactured products fell over the course of the month (-1.1% after -0.5%) due to winter sales.
Seasonally adjusted consumer prices are expected to rise by 0.5% in January 2025, after rising by +0.2% in December.
Over the course of one year, consumer prices will rise by 1.7% in January 2025, after rising by +1.3% in December. The year-long acceleration of prices for services (+2.5% after +2.2%) and energy (+2.7% after +1.2%), along with the recovery in prices of manufactured products (+0.2% after -0.4%), explains this rise in inflation. Over the course of the year, food prices remained almost stable (+0.1% after stabilization), and tobacco prices rose more slowly than in December (+6.0% after +8.7%).
Slight rise in core inflation in one year
Core inflation is expected to rise slightly over a one-year period of +1.4% in January 2025, after +1.3% in December.
The Harmonized Consumer Price Index (HICP) fell 0.2% over a one-month period, after hitting +0.2% in December. For the year, it rose 1.8%, as in December.
Inflation in services rises year-on-year
Over the year, service prices increased by 2.5%, after rising +2.2% in December. Over the course of a year, the prices of health services have rebounded (+1.9% after -1.1%), driven by medical services (+8.9% after +1.5%), especially general practitioners (+16.1% after +1.7%) and specialists (+3.2% after +1.3%). Prices for dental services are falling at a slower pace than in December (-0.1% after -1.7%).
Over the course of the year, prices for “other services” increased at the same rate as in December (+3.5%), but trends varied: social protection prices accelerated (childcare services, retirement homes for older people, homes for the disabled people, domestic help; +4.6% after +2.9%), recreational and cultural services (+1.4% after +1.2%), and services related to housing maintenance and repair (+2.7% after +2.4%). On the other hand, insurance prices slowed (+9.0% after +9.5%), maintenance and repair services for private vehicles (+3.2% after +4.7%), miscellaneous services related to private vehicles (+2.2% after +2.7%), catering (+2.1% after +2.4%), and accommodation services (+5.5% after +6.0%).
Over the course of a year, transport prices slowed (+1.5% after +5.3%), driven by lower air transport prices (-2.5% after +6.2%) and a slowdown in rail prices (+3.2% after +4.8%). Conversely, road passenger prices are accelerating growth (+6.0% from +4.9%).
Prices of manufactured goods rose 0.2% year-on-year in January, after -0.4% in December. Prices of clothing and footwear rose again over the course of a year (+1.7% after -0.4%).
Over the year, prices of “other manufactured products” increased by +0.3%, after -0.2% in December. Vehicle prices are rising rapidly (+2.4% after +1.2%), driven by car prices, and sports equipment prices (+1.0% after stabilization). Prices for toys, toys and hobbies are also rebounding (+0.2% after -2.1%), while prices for newspapers, books and stationery are rising at a slower pace (+2.0% after +2.4%).
The monthly French final consumer price index and its impact on the economy
The interest in the final French CPI report in euros on a monthly basis lies in its role as a leading economic indicator. It provides insights into inflation trends, consumer behavior, and economic health in France, which can influence monetary policy decisions taken by the ECB.
The French final consumer price index can significantly affect the Eurozone economy in several ways:
Inflation indicators: A rise in the CPI may indicate increased inflation, which may influence the ECB’s monetary policy decisions, potentially leading to interest rate adjustments.
Consumer spending: High consumer prices can erode purchasing power, affecting consumer confidence and spending, which are crucial for economic growth.
Investment decisions: Inflation trends can influence business investment decisions, as companies may adjust their strategies based on projected costs and consumer demand.
Regional comparisons: As France is a major economy in the Eurozone, its CPI trends can affect perceptions of economic health across the region, affecting investor sentiment and currency stability.
Trade balance: Changes in domestic prices can affect exports and imports, as higher prices may reduce competitiveness abroad.
Assessing economic growth: Low or stable CPI figures may encourage the ECB to maintain or even lower interest rates to stimulate economic growth, especially if other economic indicators point to weakness.
Future guidance: CPI trends can influence the ECB’s communication strategy regarding future policy trends, affecting market expectations and economic behavior.
Quantitative easing: Persistently low inflation may prompt the ECB to continue or expand quantitative easing measures to support the economy, while rising inflation may reduce such measures.
