Inflation in France continues to decline and has already fallen below the European Central Bank’s (ECB) target of 2%, reaching its lowest level in more than four years. About this informs Bloomberg.
In annual terms, consumer price growth in May was only 0.6%, the lowest since December 2020. For comparison, analysts expected inflation at the level of 0.9%. The head of the Bank of France, François Villerois de Gallo, described these data as “another very encouraging signal of ongoing disinflation.”
Against this background, it is expected that on June 5, the ECB will make a decision on the next, seventh in the current cycle, lowering the deposit rate – to the level of 2%. Lithuania’s Central Bank Governor Gediminas Shimkus on Monday expressed support for further easing of monetary policy, pointing to a growing risk that inflation will remain below the target level.
The decline in inflation rates in France in May was influenced by an 8.1% year-on-year decrease in the price of energy sources, as well as a 0.2% decrease in the prices of industrial goods. In the services sector, which is considered a sensitive indicator of domestic price pressure, inflation slowed from 2.4% to 2.1%.
We will remind you that in April 2025, the ECB already lowered three key interest rates by 25 basis points. This decision was made against the background of easing inflationary pressure and increased economic uncertainty in the world.
