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AFP
Published
Jul 16, 2009
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French inflation goes 0.5-pct negative

By
AFP
Published
Jul 16, 2009

PARIS — French consumer prices over 12 months fell by 0.5 percent in June, official data has shown, marking a deflationary step for the second month running but showing a monthly rise of 0.1 percent.


Photo: AFP

In May, prices over 12 months had shown a fall, of 0.3 percent, for the first time since 1957, owing mainy to a fall in the price of oil from a high point in the middle of 2008.
An extended period of falling prices amounts to deflation, a serious threat to an economy since it can set in hand a vicious spiral of falling demand, falling investment and employment, and a further fall in prices.

Underlying inflation, excluding public sector prices and volatile prices for energy and basic agricultural supplies, was steady at 1.5 percent over 12 months from 1.6 percent in May, the national statistics institute which published the data, said.

But energy prices rose by 3.2 percent in June from the levels in May. However, prices of fresh food products fell by 3.8 percent.

The retail sales period began during the month and this explained a fall of 0.2 percent in prices for manufactured goods, notably for clothing and for shoes which fell by 0.8 percent.

Food prices, excluding prices for fresh products, fell by 0.1 percent in June.

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