French inflation at 2.4 percent

14th September 2004, Comments 0 comments

PARIS, Sept 14 (AFP) - French inflation reached 0.3 percent in August from July and 2.4 percent on a 12-month basis owing to the end of summer sales and sharply higher oil prices, data released Tuesday by the national statistics institute Insee showed.

PARIS, Sept 14 (AFP) - French inflation reached 0.3 percent in August from July and 2.4 percent on a 12-month basis owing to the end of summer sales and sharply higher oil prices, data released Tuesday by the national statistics institute Insee showed.  

"In August the increase in the consumer price index was explained mainly by the end of summer sales and by higher prices for petroleum products," Insee said in a statement.  

Looking forward, CDC-Ixis economist Laure Maillard said: "Inflation should ease slightly in the coming months, to around 2.2 percent in December."  

However, she added: "That will only be slow and gradual, we cannot expect a significant drop in oil prices, which might even increase in the fourth quarter."  

Marc Touati at Natexis Banques Populaires struck a similar tone, saying: "Inflation should remain tamed in the next few months, between 2.2 and 2.4 percent until the beginning of 2005 and then dropping below 2.0 percent sometime around next spring" in the northern hemisphere.  

Although the European Central Bank has set 2.0 percent as its medium-term inflation target, Touati said: "On the face of it, the risks of inflation getting out of hand remain particularly limited and certainly do not justify an imminent increase in interest rates."

© AFP

Subject: French News

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