By Joshua Kirby
France experienced a lower-than-expected increase in prices in January, providing a favorable outcome for eurozone-wide efforts to curb inflation at the beginning of the year.
According to provisional numbers released on Wednesday by national statistics agency Insee, the country's consumer-price index, which measures a wide range of goods and services, rose by 3.1% compared to the same month last year. This decrease follows a 3.7% increase in December and falls short of economists' predictions for a 3.4% rise, as reported by The Wall Street Journal.
When adjusted to conform to European standards, consumer prices showed a 3.4% increase, down from 4.1% previously.
January's decline in inflation can be attributed to significant decreases in energy prices, which had driven overall prices up in December. Additionally, there were slight decreases in prices for food and manufactured goods. On the other hand, prices for services, a significant driver of inflation, increased slightly.
This outcome provides support to the European Central Bank's ongoing efforts to tame inflation throughout the eurozone during the initial months of 2024. It sets the stage for potential interest rate reductions later in the year. Spain raised concerns earlier this week when it reported an unexpected rise in consumer prices, largely due to increased electricity bills in January.
Economists are expecting a slight easing in price increases when the inflation figures for the eurozone are reported on Thursday. The ECB anticipates inflation to moderate to an average of 2.7% throughout 2024 in the 20-member euro bloc. This indicates that the 2% inflation target could be achieved later this year.
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