Inflation in France clearly on the decline – good omen for the euro zone

Paris (Reuters) – After lower inflation rates in Germany and Spain, inflation is also falling sharply in France.

As reported by the Insee statistics office in Paris on Friday, the inflation rate fell to 5.6 percent in March from 6.3 percent in February. In Germany it fell to 7.4 from 8.7 percent in March. And in Spain, the lowest rate since August 2021 was reached at 3.3 percent. In February it was still 6.0 percent in the Mediterranean country.

The clearly declining price pressure in three economic heavyweights in the euro zone is considered a good omen for the development in the entire currency area: A decline to 7.1 percent from 8.5 percent in February is expected for the inflation data due late in the morning. A so-called base effect with regard to energy prices plays an important role in the easing of price pressure: After the Russian invasion of Ukraine, they rose sharply in March 2022, which was reflected in a significantly higher inflation rate. Since March, the increased price level has been the basis for calculating inflation, which is pushing the rate down.

The European Central Bank (ECB) raised interest rates again this month to curb inflation in the euro zone. The monetary watchdogs are worried about the still stubbornly high core rate, which excludes food and energy costs.

(Report by Reinhard Becker, Frank Siebelt; Edited by Sabine Ehrhardt; If you have any questions, please contact our editorial team at [email protected] (for politics and the economy) or fran[email protected] (for companies and markets ).)