Inflation and consumer price indexes in France - statistics & facts
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According to a survey conducted in June 2024 in France, 556 euros were missing each month for households to live comfortably, which was 107 euros more than in 2020. Inflation and rising prices have affected French families' budgets in every area and caused many concerns for the future. The COVID-19 pandemic, the war in Ukraine, and the energy crisis all contributed to the deterioration of the French financial situation.
Inflation allows firms to forecast price increases over the medium term, encourages households to consume rather than save, and keeps interest rates low. However, certain extreme cases such as hyperinflation (high and rapid inflation) and deflation (meaning a significant fall in prices coupled with a fall in wages) should be avoided, because of their counterproductive impact on the national economy. The whole point of price increases lies in a balance maintained at around two percent. Since the beginning of 2023, inflation has been decreasing in France from seven percent in January to 1.75 percent almost two years later.
Inflation and national economy
Inflation refers to the loss of a currency's purchasing power, which means higher prices for households. While, at first glance, price increases may seem undesirable, inflation, when regular and moderate, is considered an ideal situation and one towards which economic policies tend to be directed.Inflation allows firms to forecast price increases over the medium term, encourages households to consume rather than save, and keeps interest rates low. However, certain extreme cases such as hyperinflation (high and rapid inflation) and deflation (meaning a significant fall in prices coupled with a fall in wages) should be avoided, because of their counterproductive impact on the national economy. The whole point of price increases lies in a balance maintained at around two percent. Since the beginning of 2023, inflation has been decreasing in France from seven percent in January to 1.75 percent almost two years later.
