FX.co ★ France Inflation Rate Slows to 0.7%

France's annual inflation rate notably declined to 0.7% in May 2025, marking its lowest point since February 2021. This was a decrease from the steady 0.8% experienced in both March and April, and fell short of the anticipated 0.9%, as revealed by preliminary estimates. The tempering of inflation was primarily attributed to a slower rise in service prices, which increased by 2.1%, down from 2.4%. This was largely due to a slowdown in transportation costs and a more pronounced drop in communication prices. Energy prices saw a significant reduction, dropping by 8.1% following a 7.8% decrease the previous month. Conversely, food price inflation witnessed a slight uptick, rising to 1.3% from 1.2%, while tobacco prices maintained a steady growth rate of 4.1% annually. Prices of manufactured goods continued their decline at a consistent annual rate of -0.2%. On a month-to-month basis, the Consumer Price Index (CPI) decreased by 0.1%, with energy costs falling for the fourth consecutive month, although food prices kept rising. At the same time, the EU-harmonised CPI recorded a 0.6% year-on-year increase, its lowest since December 2020, and saw a 0.2% monthly decrease.