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.
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.
“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.