World Economy

French Inflation Steadies

French Inflation SteadiesFrench Inflation Steadies

French inflation steadied in July as a slight rise in services and energy prices offset a slowdown in food prices, national statistics agency Insee said Friday.

The consumer price index in the eurozone’s second largest economy rose 0.7% on year in July, the same rate as June. The figure was in line with economist expectations, MarketWatch reported.

The European Central Bank last week said the economic recovery in the eurozone is robust, but that patience and persistence were necessary to get inflation back toward the central bank’s 2% target.

France’s HICP—the inflation index closely watched by the ECB—rose 0.8% on year in July, the same rate as in June, Insee said.

French economic growth held steady as Emmanuel Macron was elected new president in May, expanding 0.5% in the second quarter of the year.

Quarterly GDP growth in the eurozone’s second largest economy has now remained at 0.5% since the end of 2016. The reading came in line with forecasts, while year on year growth accelerated sharply from 1.1% to 1.8%–the highest level since 2011 (forecast: 1.6%).

The official figures will be a boon for President Macron who has vowed to overhaul the French economy after years of lagging behind its major eurozone rival, Germany.

Unemployment in France is now at its lowest since the eurozone crisis, inflation has been tamed, and business surveys are revealing the best confidence levels in a decade.

Macron’s economic plans include major changes to the French labor market, allowing employers to offer more flexible wage bargaining. He is also promising to reduce corporate tax rates and is aiming to bring down the country’s troublesome budget deficit.

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