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Inflation in France will remain above 6.5%

Ukraine’s battle, difficulties in the provision of uncooked supplies, supplies and supplies: all these pushes enhance the strain on costs. According to INSEE, which launched its new forecast on Friday, inflation in France will expertise a pointy soar once more in the approaching months.

Expected at 5.9% in June, the value enhance in September ought to be near 7%. This charge ought to then be between 6.5% and seven% by the top of the yr. As an annual common, it will attain 5.5% in 2022. Not heard since 1985.

Under the mixed results of inflation and geopolitical uncertainty, development will exit of steam, however France ought to keep away from its worst state of affairs this yr. Like the Bank de France, the Institute of Statistics estimates that the nation’s GDP will develop by 2.3% in 2022.

Increased disposable earnings by greater than 4%

After a 0.2% contraction in the primary quarter, it will enhance by 0.2% in the subsequent three months, adopted by a 0.3% enhance in the third and fourth quarters. According to the INSEE, the French financial system will thus return to development near its common charge earlier than the Covid-19 disaster. The labor market will resist: 260.00 jobs will be created this yr.

In this context, whole household disposable earnings, which fell in the primary quarter, ought to be recovered in the second half of the yr and even accelerated. Finally, by 2022, it will develop 4.1% in opposition to the present euro, in response to the INSEE.

1 hit level

A pointy enhance pushed by wage dynamics, tariff discount and help measures designed by the chief in its “buying energy bundle”. According to INSEE, inflation will have an effect on wages: the opportunity of a brand new automated revaluation of SMIC, in August or subsequent October. Since October 2021 the minimal wage has already elevated by about 6% Rising costs will additionally have an effect on wage reconsideration However, the institute is just not seeing a horrible price-pay loop by economists at this stage.

Furthermore, though the absence of an absolute majority in the National Assembly makes its adoption unsure immediately, INSEE 1 assesses the affect of all measures introduced earlier than the legislative elections (“Macron Bonus Renewal”, Pension Revaluation and Social Minima for Civil Servants from July 3). The authorities should unveil its trade-off for civil servants on Tuesday, including tax and social safety contributions to the top of the yr, together with a programmed abolition of audiovisual license charges and the top of housing tax.

Despite a transparent restoration in the second half of the yr, because of value will increase, buying energy ought to be diminished by 1 level per unit in 2022 (after a 2% enhance in 2021). A collapse that the French haven’t skilled since 2013. That yr, buying energy fell 1.8%.

In 2022, the help measures already in place by the chief – tariff shields on fuel and electrical energy costs, rebates on the pump – eased a few of the push for rising costs. According to INSEE, inflation would have been 2 factors increased in May.

High financial savings charge

Faced with this phenomenon, the French are removed from being put in the identical boat. In April, inflation for farmers was 1 level increased than for executives. The oldest and those that reside in rural areas are additionally extra affected than the younger or the residents of Paris.

In this context, INSEE estimates that family consumption, which declined sharply firstly of the yr, can nonetheless get well and expects a return of 0.4% in the second quarter and a rise of 0. 2% in the subsequent two.

The institute bets that on a wait-and-see foundation, the French will keep increased financial savings charges than earlier than the Covid epidemic (16.3%), regardless of value will increase. Its prediction is a catastrophe, its economists acknowledge. Those who count on good resistance to company funding. For now, the French financial system has saved up the regular rise in inflation and that is excellent news, however the query stays how lengthy.

Video. Inflation: Rising costs of 10 each day commodities and companies

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