Inflation in France rises to 2.4% as energy costs drive prices up

New Delhi (India), June 12: French consumer prices rose by 2.4% in May, official data showed on Friday, driven largely by higher energy costs amid the ongoing West Asia conflict.

The increase reflects renewed pressure on households as oil prices surged following disruptions in the Strait of Hormuz and continued uncertainty surrounding the US-Iran situation.

While core inflation remained relatively stable, rising food and transport costs also contributed to the overall increase in consumer prices.

The French government said it is closely monitoring developments and may introduce targeted relief measures to shield consumers from further price shocks and rising living costs.

According to the data released by the European Commission earlier in May, France's real GDP is anticipated to go up by 0.8% in the current fiscal year. The EU, in its estimation, stated that the net exports of the country is expected to remain strong but it will be severely impacted by the West Asian conflict.

The EU further stated that the net exports are forecast to contribute 0.2 percentage points to GDP growth in 2026, driven by aeronautics and defence exports.

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However, growth of private consumption is expected to remain subdued, dragged down by the impact of higher energy prices on real disposable incomes. The saving rate is projected to decline moderately in 2026, though remaining high at 17.6%, according to the EU estimates.

In 2027, economic activity is projected to gain some momentum, with real GDP growth reaching 1.1%, on the back of declining energy prices. This improvement is supported by a slightly expansionary fiscal stance, assuming unchanged policies.

On the other hand, French President Emmanuel Macron has urged the stakeholders to strengthen economic growth path of the world during a videoconference held among G7 representatives, China and the International Monetary Fund (IMF).

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"Our common goal should be clear: It's to put the global economy back on a stronger growth path," Macron said at the beginning of the Global Convergence Summit for Growth held ahead of the G7 Summit scheduled for June 15-17, reported news platform Anadolu Agency.

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