In February 2025, the consumer price index remained stable over the course of one month, following a +0.2% increase in January. The sharp decline in energy prices (-4.6% after +1.6%), which was explained by a decline in electricity prices (-12.6% after -0.1%), was offset on the one hand by higher service prices (+0.6% after +0.3%), particularly transport services (+3.9% after -8.3%), rents, water, and household waste collection (+1.1% after +0.2%), and on the other hand by a rebound in manufactured goods prices (+0.3% after -1.1%).
Over the course of one month, tobacco prices slowed (+0.2% after +3.8%), while food prices declined slightly (-0.1% after +0.3%). After seasonally adjusted inflation, consumer prices will decline by 0.5% in February 2025, following a +0.5% increase in January. Over one year, consumer prices will rise by 0.8% in February 2025, following a +1.7% increase in January. For the first time since February 2021, the annual change has fallen below 1%.
Energy prices sharply declined over the year (-5.8% after +2.7%), explaining the decline in inflation. The slowdown in services prices (+2.2% after +2.5%), manufactured goods (stable after +0.2%), and tobacco (+4.5% after +6.0%) also contributed, but to a lesser extent. Conversely, food prices have accelerated slightly over the year (+0.3% after +0.1%). Communications prices are falling at a faster rate than in January (-13.6% after -12.8%).
Slight decline in core inflation over one year
Core inflation is expected to slow slightly over one year and reach +1.3% in February 2025, after reaching +1.4% in January.
The Harmonized Consumer Price Index (HICP) rose over one month (+0.1% after -0.2% in January). Over one year, it rose by 0.9%, after recording +1.8% in January.
Sharp decline in energy prices over one year
Over one year, energy prices are expected to fall by 5.8% in February 2025, after rising by 2.7% in January. This year-on-year decline is primarily due to lower electricity prices (-12.6% after +9.3%), driven by a 15% average decrease in regulated tariffs, which had increased by an average of 9.5% in February 2024.
Over the year, petroleum product prices declined at a faster rate than in January (-4.5% after -1.3%), with diesel prices also declining (-5.9% after -2.0%), gasoline (-2.8% after -0.3%), and liquid fuels (-5.6% after -2.2%). Conversely, gas prices accelerated over the year (+11.7% after +3.7%).
Services inflation falls year-on-year
Over the year, service prices rose by 2.2%, following a 2.5% increase in January. Over the year, prices for “other services” slowed (+3.3% after +3.5%), such as insurance (+8.5% after +9.0%), leisure and cultural services (+1.0% after +1.4%), and social protection (childcare services, retirement homes for the older people and disabled people, and home assistance; +4.2% after +4.6%).
Conversely, restaurant prices accelerated over the year (+2.2% after +2.1%), as did prices for accommodation services (+6.0% after +5.5%). Over the year, prices for health services also slowed (+1.2% after +1.9%). Rent, water, and household waste removal prices rose year-on-year at the same rate as in January (+2.7%).
The increase in transport costs in February was similar to that in January (+1.5%). Land transport prices are slowing (+5.6% after +6.0%), as are rail transport prices (stable after +3.2%), while air transport prices are falling at a slower rate over one year than in January (-0.1% after -2.5%).
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.
