France's CPI Cools to 0.3 Percent in January as Energy Prices Drop

(MENAFN) France's annual inflation cooled sharply in January, dropping to 0.3 percent from 0.8 percent in December 2025, as easing service costs and a steep fall in energy prices weighed heavily on the overall index, the National Institute of Statistics and Economic Studies (INSEE) reported Tuesday.

INSEE attributed the deceleration primarily to a pullback in services inflation, which moderated to 1.7 percent after rising 2.1 percent the previous month, alongside a steeper retreat in manufactured goods prices, which slid 1.2 percent following a more modest 0.4 percent decline in December.

Energy prices deepened their downward trajectory, falling 7.6 percent year on year in January — accelerating from a 6.8 percent drop in December — while tobacco price growth eased to 2.7 percent from 4.1 percent. Food prices bucked the broader trend, nudging higher to 1.9 percent from 1.7 percent in December.

On a monthly basis, the index retreated after a 0.1 percent rise in December, driven largely by a seasonal slump in manufactured goods prices, which tumbled 1.9 percent — compared with a 0.3 percent dip the prior month — as winter clearance sales in clothing and footwear pulled prices lower.

Food prices climbed 0.5 percent month on month, outpacing December's 0.2 percent gain, while energy prices rebounded 0.8 percent after a 1.6 percent decline. Tobacco prices jumped 2.4 percent following a flat reading the previous month, whereas service prices edged down 0.1 percent after a 0.4 percent rise in December.

Underlying inflation — a closely watched gauge of persistent price pressures — eased to 0.7 percent in January, down from 1.1 percent in December, INSEE said, signaling a broader softening in the French economy's price environment heading into 2026.

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