France's Inflation Slows to 0.9%, Falling Below ECB's 2% Target Amid Modest Economic Growth

August 29, 2025
France's Inflation Slows to 0.9%, Falling Below ECB's 2% Target Amid Modest Economic Growth
  • The harmonized index of consumer prices (IPCH) rose by 0.8% year-on-year and 0.5% month-over-month, reflecting a modest inflation rate within the EU.

  • Gas prices have surged by 11% in 2025, according to UFC Que Choisir, although overall energy prices, including petroleum products, have continued to slow down.

  • France's inflation rate has slowed significantly, with consumer prices increasing by just 0.9% over the year in August, down from previous months, and well below the European Central Bank's 2% target.

  • Energy prices, especially for petrol and petroleum, decreased by 6.2% in August after a 7.2% decline in July, with household energy consumption falling by 1.7% in July.

  • Electricity prices have decreased by an average of 3% in August following a 15% drop earlier in the year, but over the past 15 years, electricity costs have risen by more than 50%, with subscription prices also increasing.

  • Food and tobacco prices remained steady from July, with tobacco inflation at 4.0% and food prices at 1.6%, both unchanged from previous months.

  • Energy costs saw a smaller decline of 6.2%, and food inflation remained steady at 1.6%, while tobacco prices stayed at 4%.

  • The overall slowdown in inflation is mainly due to slower price increases in services, particularly transportation, which rose by 2.1% in August, down from 2.5% in July.

  • Transport costs have contributed significantly to the inflation slowdown, with service prices rising at a slower pace, while food prices continued to grow at 1.6%.

  • Prices for manufactured goods declined faster in August, decreasing by 0.3%, compared to 0.2% in July.

  • France's GDP grew by 0.3% in the second quarter, following a 0.1% increase in the first quarter, indicating a modest economic expansion.

  • France's inflation rate is now well below the European Central Bank's 2% target, following a period of significant inflation between 2021 and 2023.

Summary based on 5 sources


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Sources


France Inflation Rate Slows to 0.9%

Trading Economics • Aug 29, 2025

France Inflation Rate Slows to 0.9%

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