Significant Drop in French Inflation Rates

In a surprising turn of events, France's Consumer Price Index (CPI) witnessed an annual increase of only 0.8% in February. This marks the first time since February 2021 that the inflation rate has fallen below 1%, as reported by INSEE, the national statistical office, in their preliminary findings released on Friday.

Factors Behind the Decline

The significant decrease from January's 1.7% inflation rate, which also fell short of analysts' predictions, is largely attributed to a 5.7% drop in energy prices compared to February 2024. However, not all sectors experienced a downturn. Tobacco prices surged by 4.5%, and service costs increased by 2.1%.

Monthly Inflation Rates Remain Stable

On a month-to-month basis, inflation rates in February remained unchanged. The Harmonized Index of Consumer Prices (HICP) also reflected this stability, recording a 0.9% year-on-year increase, consistent with the previous month's figures.