The increase in prices was limited to 2.1% over one year in June, according to the latest data provided by INSEE. While consumption has slightly increased again. A rebound that has not yet been felt by a large proportion of retailers.
Will the summer season finally start at the beginning of July? After particularly cold and rainy months of May and June across the country, good weather and heat should finally return, and thus launch a summer season already disrupted by the political context, in addition to the weather conditions. Especially since the macroeconomic indicators published by INSEE are encouraging to anticipate better activity in July and August. The increase in prices in France in June 2024 thus stood at +2.1% over one year, or 0.2 points less than in May, INSEE announced. A figure ” encouraging ” according to the governor of the Bank of France, François Villeroy de Galhau. “ Disinflation continues its course “, he added.
However, not all prices are falling. The detailed data provided by INSEE show that energy prices continue to increase significantly (+4.8% in June over one year). On the other hand, the prices of manufactured products are stable over one year, and especially those of food are only increasing by 0.8%. On the good news side, inflation is stagnating over one month, with an overall price increase of only 0.1% between May 2024 and June 2024.
Can consumption recover sustainably?
In this context, INSEE recorded a rebound in French household consumption of 1.5% in May, after having fallen by 0.9% in April. In detail, this increase in spending particularly benefited the food sector (+2.4%) and energy (+3.9%), while on the other hand, purchases of manufactured goods decreased slightly.
Read also: Commerce: What is the activity report for May 2024?
So, can we anticipate today a sustainable rebound in consumption for the summer season, and which would this time benefit all players in the trade? A thorny question that economists do not want to comment on, as it is difficult in the current context to make forecasts. The arrival of a massive flow of tourists for the summer season, boosted by the Paris Olympics, should in theory act as an accelerator of consumption. But on the other hand, energy prices will always slow down the purchasing power of the French, in particular with the 12% increase in the price of gas enacted on July 1st. An increase that the two parties that came out on top in the legislative election, the RN and the NFP, have promised to eliminate.
But at the same time, the political context should have a negative impact on inflation according to the forecasts of many economists. Tensions on production and wages are notably anticipated, but also a probable increase in domestic demand, which could benefit players in the trade. Added to this are also possible tensions on the financial markets, which could affect the French economy. And in particular the French sovereign debt, which saw its rating downgraded very recently, even though public debt increased by another 58.3 billion euros in the first quarter of 2024, reaching a staggering 3,159.7 billion euros (109.9% of GDP).
So many parameters that make any activity forecasts for the upcoming summer season very difficult. One thing is certain, however, more than ever, traders today need long-term stability to develop their business, or at least keep their company afloat.
Read also: Legislative: The demands of the traders’ federations
Stay informed about the news for traders and independents:
This item was given to you as a gift!
Subscribe and support the media that defends independent traders.
I subscribe
