French official inflation slows in May, 1.6 percent in year

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French consumer prices rose by 0.1 percent in May, a slower rate than in April, putting 12-month inflation at 1.6 percent, official data showed on Friday.

The latest small monthly increase was driven mainly by energy prices, although the 12-month figure fell from 1.7 percent in April.

Economists said they did not see strong inflationary pressures for the next few months, but said that the monthly increase would further erode slightly the buying power of French consumers, already suffering from the economic crisis and unemployment.

In April, prices on a monthly basis had risen by 0.3 percent.

At consultants Xerfi, economist Alexander Law commented: "Household consumption will have difficulty in getting a second wind given that it has been under big strains since the beginning of the year.

"But this does not mean that we fear inflationary tensions in the next few months."

Analysts at BNP Paribas commented that the data showed that underlying inflation, excluding energy prices, had fallen again in May to 1.4 percent.

© 2010 AFP

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