Food and fuel prices in France behind rise in cost of living

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AFP/The Local - [email protected]
Food and fuel prices in France behind rise in cost of living
A woman buys vegetables and fruits in a covered market in central Montpellier on April 7, 2020, while the country is in lockdown for the twenty second day in an attempt to curb the spread of Covid-19 disease caused by the new coronavirus. (Photo by Pascal GUYOT / AFP)

Prices for fresh food in France were up 6.3 percent in August compared to last year, according to figures released on Tuesday.


This follows an increase of 3.8 percent in July, and is a provisional estimate published by national statistics agency INSEE on Tuesday, meaning the supermarket checkout is where people living in France are most likely to feel the effects of rising inflation.

The price increase for other food products (exclusing fresh food like fruit, veg, fish, dairy and meat) was much less noticeable - only 0.3 percent.

Global food shortages

The significant change may partly be explained by global increases in the prices of basic food products, as a result of bad weather among other factors. According to the Food and Agriculture Organization of the United Nations, global food prices rose at their fastest monthly rate in more than a decade in May. Despite a slight fall in recent months, global food commodity prices were still 31 percent higher in July than in the same period in 2020.


Back in June, French agri-food companies said prices would need to increase by 9 percent in order to cover their costs. The Association nationale des industries alimentaires said the businesses it surveyed reported an increase of 22 percent to the cost of their primary food products, including 63 increases percent for poultry, 28 percent for oil, and 10 percent for sugar.

Rising inflation

French residents may also have noticed an increase in their bills, since energy prices were 12.7 percent higher in August than the previous year (12.3 percent in July).

Overall, consumer prices rose by 1.9 percent in August compared to last year, according INSEE's estimates, after a 1.2 percent increase in July. The figures would represent the most significant rise in the Consumer Price Index since November 2018.

"This increase in inflation should result in particular from the rebound in manufactured good prices linked to the end of summer sales," INSEE announced.

READ ALSO Why fuel prices are rising in France (and why that might worry Macron)

"Over one month, consumer prices should rise by 0.6 percent in August, after +0.1 percent in July," the report stated.

"The prices of manufactured goods should rebound sharply. The prices of food should accelerate in the wake of those of fresh food and those of tobacco should be stable after a decrease in the previous month. The prices of services and those of energy should slow down."

A temporary trend

Using the EU's standard measure of consumer price inflation, the HICP, French inflation rose to 2.4 percent in August from 1.5 percent in July.

The European Central Bank defines price stability as inflation rates of just below 2.0 percent, but is willing to tolerate temporary over- or undershooting of that level before stepping in.

Speaking to BFM on Monday, French central bank governor Francois Villeroy de Galhau said prices should level out in the coming months.

"We think these are temporary spikes linked to the economic recovery and supply difficulties, and that for the eurozone there is no risk of a long-term rise in inflation," he said.


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Anonymous 2021/09/02 09:59
The standard measure of inflation is much too broad brush for those most affected by it. The average pensioner , for example, will spend a much greater proportion of their income on utilities, incl electric, and food than the average worker. Consequently, their rate of inflation is very different from the standard measure. It's really no good telling the average pensioner that their actual rate of inflation is determined by a basket of goods that they never buy. The fact that gaming videos and trainers representing 0% of pensioner expenditure have come down in price is little comfort to a pensioner paying an electric bill that represents 20% of their income.

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