Inflation: Reemerging in France

Résumé 0

After reaching 5.2% in 2022, then 4.9% in 2023, inflation in France should fall back below 3% in 2024, then converge towards 2% thereafter. The inflationary episode was relatively short-lived, but this can be explained by the decline of energy prices and active public policies that limited energy inflation, as well as by wages, which did not keep pace with inflation to the detriment of workers' purchasing power. As a result, the current downturn in inflation has little to do with monetary policy, and is primarily due to the decline of energy prices and wages not keeping up with inflation. Finally, higher but controlled inflation would make it possible to reduce the debt burden by increasing potential nominal growth in a French economy that is largely characterized by fixed-rate, long-maturity borrowing. JEL classification: E24, E31, E61.