This month, prices experienced their biggest monthly drop since 1990, according to INSEE.
Good news for consumers. After several months marked by a persistent surge in prices, inflation has slowed considerably. It thus returned below the symbolic 2% mark in August, and continued this trend in September. According to INSEE’s first estimate, inflation over one year reached 1.2% this month. Its lowest level in more than three years, in July 2021.
Over one month, prices fell by 1.2% – the largest monthly drop since 1990 – while, on the contrary, they increased by 0.5% in August. This considerable slowdown can be explained firstly by “a decline in energy prices, particularly those of petroleum products”note the statisticians. Prices at the pump have in fact collapsed, according to government data: a liter of diesel fell by fourteen cents, between the end of June and the end of September, and that of SP95-E10 by 13.7 cents. Enough to relieve the wallets of motorists.
At the same time, prices for health services have fallen, “prices of services would slow down over a year and those of manufactured products would decrease at a slightly more sustained pace than in the previous month”adds the INSEE note. Likewise, “certain prices”driven upwards by the Olympic and Paralympic Games, have gradually returned to normal, she notes, without specifying which ones are concerned.
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Inflation falls faster than expected
Conversely, certain prices have started to rise again, such as “food and tobacco prices”which increased by 0.5% over one month. At the same time, “the prices of manufactured products should increase over one month, driven by the increase in the prices of clothing and shoes”.
In theory, the decline observed in recent weeks should continue, according to national statisticians, who were surprised by the speed of the slowdown. “In total, inflation would remain below +2.0% by the end of the year, and would stand at +1.6% year-on-year in December 2024”predicted INSEE in its latest projections. Specifying, in passing, that “under these assumptions, an automatic revaluation of the minimum wage by the end of the year appears very uncertain”. The Banque de France, for its part, was counting on a rate of 2.5% at the end of the year, then 1.5% in 2025, thanks in particular to the fall in electricity prices. “After a transitional interruption in the second half of 2024, the deceleration in service prices would continue and allow underlying inflation to fall to +1.9% in 2026”added the institution in its latest macroeconomic projections.
