Inflation was predicted to climb in February, but not at the same pace as in January. France’s inflation rate was 3.6 percent in February, up from 2.9 percent in January (the Reuters consensus forecast was 3.2 percent ). The harmonised index of consumer prices (HICP), which is crucial to the European Central Bank (ECB) and enables for cross-national comparisons, was 4.1 percent in February, up from 3.3 percent in January. Energy prices continue to be the most significant contributor to consumer price inflation (+21% year-on-year). However, the specifics suggest that inflationary pressures are spreading, with price increases for services, manufactured products, and food picking up in February. Despite this, annual price growth for these various product categories remains close to 2%. (1.9 percent for food, 2.2 percent for services and manufactured goods).
Inflation in France is currently manageable and in line with the ECB’s aim, with the exception of energy prices, which is not the situation in other European countries.
Why is France’s inflation rate so low?
As a result, while inflation in France is rising rapidly, it is still lower than inflation in other European countries. The harmonised inflation index was lower in France (3.3 percent) than in all other eurozone countries, according to January data (the last to allow comparisons because February figures have yet to be published for the eurozone) (5.1 percent on average). The fundamental reason for the disparity between France and its European neighbors is that energy prices did not rise as much in France as they did elsewhere (see graph below). This is owing to the French government’s initiatives to reduce the impact of rising energy prices on consumers, such as the “tariff shield,” which fixes the price of gas at the level of 2021.
Furthermore, the limiting of energy prices at a maximum growth of 4% in 2022 has a significant role: the electricity component of the HICP is rising by just 4% in France, compared to an average of more than 27% across the eurozone. Finally, because gas and electricity prices are rising at a slower pace in France than in the eurozone, there is less inflationary pressure on all sectors of the economy, resulting in lower non-energy inflation. Throughout the year, we predict French inflation to be lower than that of the eurozone. However, because of the decline in government initiatives and the lower baseline in France, the situation in 2023 could be worse: inflation in France could be greater than elsewhere in Europe.
What is China’s inflation rate?
According to Trading Economics global macro models and analysts, China’s inflation rate is predicted to be 1.20 percent by the conclusion of this quarter. According to our econometric models, the China Inflation Rate is expected to trend around 2.00 percent in 2023.
What will France’s unemployment rate be in 2020?
In 2020, France’s unemployment rate was estimated to be about 8.62 percent. France is one of the world’s most strong, advanced, and developing economies, and a member of the Group 7 and G20. With a population of about 64 million people, France’s economy must adapt to meet the demands of an expanding workforce.
What is Europe’s inflation rate?
From 2000 to 2022, the European Union’s inflation rate averaged 1.94 percent, with a high of 5.60 percent in January 2022 and a low of -0.60 percent in January 2015.
What is a reasonable rate of inflation?
The Federal Reserve has not set a formal inflation target, but policymakers usually consider that a rate of roughly 2% or somewhat less is acceptable.
Participants in the Federal Open Market Committee (FOMC), which includes members of the Board of Governors and presidents of Federal Reserve Banks, make projections for how prices of goods and services purchased by individuals (known as personal consumption expenditures, or PCE) will change over time four times a year. The FOMC’s longer-run inflation projection is the rate of inflation that it considers is most consistent with long-term price stability. The FOMC can then use monetary policy to help keep inflation at a reasonable level, one that is neither too high nor too low. If inflation is too low, the economy may be at risk of deflation, which indicates that prices and possibly wages are declining on averagea phenomena linked with extremely weak economic conditions. If the economy declines, having at least a minor degree of inflation makes it less likely that the economy will suffer from severe deflation.
The longer-run PCE inflation predictions of FOMC panelists ranged from 1.5 percent to 2.0 percent as of June 22, 2011.
Why is inflation in 2022 so high?
As the debate over inflation continues, it’s worth emphasizing a few key factors that policymakers should keep in mind as they consider what to do about the problem that arose last year.
- Even after accounting for fast growth in the last quarter of 2021, the claim that too-generous fiscal relief and recovery efforts played a big role in the 2021 acceleration of inflation by overheating the economy is unconvincing.
- Excessive inflation is being driven by the COVID-19 epidemic, which is causing demand and supply-side imbalances. COVID-19’s economic distortions are expected to become less harsh in 2022, easing inflation pressures.
- Concerns about inflation “It is misguided to believe that “expectations” among employees, households, and businesses will become ingrained and keep inflation high. What is more important than “The leverage that people and businesses have to safeguard their salaries from inflation is “expectations” of greater inflation. This leverage has been entirely one-sided for decades, with employees having no capacity to protect their salaries against pricing pressures. This one-sided leverage will reduce wage pressure in the coming months, lowering inflation.
- Inflation will not be slowed by moderate interest rate increases alone. The benefits of these hikes in persuading people and companies that policymakers are concerned about inflation must be balanced against the risks of reducing GDP.
Dean Baker recently published an excellent article summarizing the data on inflation and macroeconomic overheating. I’ll just add a few more points to his case. Rapid increase in gross domestic product (GDP) brought it 3.1 percent higher in the fourth quarter of 2021 than it had been in the fourth quarter of 2019. (the last quarter unaffected by COVID-19).
Shouldn’t this amount of GDP have put the economy’s ability to produce it without inflation under serious strain? Inflation was low (and continuing to reduce) in 2019. The supply side of the economy has been harmed since 2019, although it’s easy to exaggerate. While employment fell by 1.8 percent in the fourth quarter of 2021 compared to the same quarter in 2019, total hours worked in the economy fell by only 0.7 percent (and Baker notes in his post that including growth in self-employed hours would reduce this to 0.4 percent ). While some of this is due to people working longer hours than they did prior to the pandemic, the majority of it is due to the fact that the jobs that have yet to return following the COVID-19 shock are low-hour jobs. Given that labor accounts for only roughly 60% of total inputs, a 0.4 percent drop in economy-side hours would only result in a 0.2 percent drop in output, all else being equal.
What will be the rate of inflation in 2022?
According to a Bloomberg survey of experts, the average annual CPI is expected to grow 5.1 percent in 2022, up from 4.7 percent last year.
How much is inflation in Germany?
WIESBADEN, Germany In March 2022, Germany’s inflation rate is anticipated to be +7.3 percent. The change in the consumer price index (CPI) from the same month a year before is used to calculate the inflation rate.