The first effects of the war in the Middle East are starting to be felt on inflation in France: it jumped 1.7% in March due to rising energy prices, a trend whose magnitude remains uncertain for the coming months.
According to a preliminary estimate published by Insee on Tuesday, consumer prices in France increased by 1.7% year-on-year in March, following a 0.9% increase in February.
This inflation increase is primarily attributed to a significant rebound in energy prices, especially petroleum products (+7.3% year-on-year compared to -2.9% in February), according to the National Institute of Statistics and Economic Studies.
Economists expected this inflation jump in March, as the Middle East war raised the price of gas, oil, and consequently, fuel since it began on February 28th.
“There is no surprise with this figure, largely explained by the rise in energy inflation, which has returned to positive territory,” explained Maxime Darmet, an economist at Allianz Trade, to AFP.
“The figures published today confirm that a first wave of inflation is already underway,” also estimated economist Charlotte de Montpellier from ING.
Economist Sylvain Bersinger from Bersingerco also pointed out that the consequences of the war in Iran are already being felt, even if the inflationary shock has not yet spread throughout the value chain.
In detail, services prices have slightly increased year-on-year, as well as tobacco, while prices of manufactured products have decreased faster than last month.
The harmonized index of consumer prices (HICP) in France increased by 1.9% year-on-year in March, up from 1.1% in February.
With the surge in energy prices not yet impacting other prices, economists anticipate this effect to occur in the coming months.
