France’s consumer price annual inflation unexpectedly turned negative for the first time in nearly a year during February, preliminary figures from the statistical office INSEE showed Friday.
The consumer price index dropped 0.2 percent year-on-year, defying economists’ expectations for no change. The measure climbed 0.2 percent in each of the previous two months.
The latest decline was the first since March 2015, when the CPI fell 0.1 percent, and was also the biggest after a 0.3 percent drop in February last year.
The INSEE attributed the latest fall in the CPI to the drop in energy prices. Further, the agency said the offset of the school holiday calendar should have a downward effect on the prices of services related to tourism this year.
Compared to the previous month, the CPI rose 0.2 percent in February, which was slower than the 0.4 percent gain economists had forecast. The increase was mainly due to the rebound in prices of manufactured products after the end of winter sales, the agency said.
Service prices should rise less than last year while the prices of fresh foodstuffs and petroleum products should decrease again, the INSEE added.
The EU measure of inflation, the harmonized index of consumer prices, or HICP, fell 0.1 percent year-on-year in February after a 0.3 percent gain in January. Economists had forecast a 0.1 percent increase.
On a month-on-month basis, the HICP rose 0.3 percent in February, which was slightly less than the 0.3 percent gain economists had forecast.
Separately, the INSEE reported that the industrial producer prices for the French market dropped 0.8 percent month-on-month in January after a 1.2 percent fall in December. Year-on-year, producer prices decreased 2.5 percent.
The material has been provided by InstaForex Company – www.instaforex.com