French inflationary pressures are continuing to ease, with fewer firms raising prices and some even cutting them, the country’s central bank said.
Only 8% of industrial companies imposed increases in June, the lowest proportion in more than two years, according to the Bank of France’s monthly survey of 8,500 businesses. The share reducing tariffs reached a near three-year high of 6%.
In construction, fewer businesses lifted prices last month than in May, while in services the measure was stable.
The survey adds to signs that inflation in the euro area’s second-largest economy has passed its peak. Bank of France Governor Francois Villeroy de Galhau said at the weekend that the slowing pace of consumer price increases means the European Central Bank will “soon reach the high point of interest rates.”
Briefing journalists on the findings of the survey, Bank of France Chief Economist Olivier Garnier said the indicators of selling prices of firms support the institution’s forecast that inflation will fall back from the second half of this year, and further still in 2023 and 2024.
“In all sectors, there is a clear reduction in the share of businesses raising prices,” Garnier said.
The survey also showed economic activity holding up in France, with growth in industry, services and construction in June. The Bank of France reiterated its forecast for a 0.1% expansion in gross domestic product in the second quarter.
