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Economics

Bank of France Sees a Renaissance of a Long-Lost Inflation Trend

  • Villeroy says euro-area heading for better balanced inflation
  • Bank of France forecasts HICP +1.5% in 2023, +1.6% in 2024
Shoppers in the Les Halles center, operated by Unibail-Rodamco-Westfield, in Paris.

Shoppers in the Les Halles center, operated by Unibail-Rodamco-Westfield, in Paris.

Photographer: Nathan Laine/Bloomberg

The French economy is set to emerge from the Covid pandemic with trend inflation significantly closer to 2%, something monetary authorities had unsuccessfully battled to achieve since the global financial crisis more than a decade ago. 

According to updated forecasts from the country’s central bank, consumer price growth will settle at around 1.5% in 2023 and 2024, after the effect of surging energy prices tails off next year. Stripping out energy and food, the rate in the euro area’s second largest economy would be 1.7% in those two years compared to around 0.7% in the seven years preceding the pandemic.