From the gas station to the supermarket, bills have swelled in recent months, which does not give cause for optimism.
Fuel, gas, fresh produce, clothing… In one year, consumer prices have increased by 1.9% overall, according to the latest statistics from INSEE. Unheard of, at least in recent years. Inflation accelerated considerably this summer, forcing the authorities to increase the minimum wage by 2% during the year, which had not happened since 2011. This general rise in prices should deal a major blow to the door. currency of the French since it will concern their main expenditure items, where it is difficult to tighten the belt.
The most precarious threatened
In detail, it is mainly energy prices that have exploded: + 12.7% between August 2020 and August 2021. For example, gas has increased by 31.2% over one year. On average, diesel today costs 1.44 euros per liter (against 1.17 in May 2020), and 1.56 euros for the SP95 – E10 (against 1.22). In some gas stations, still very rare admittedly, the price has even already exceeded the fateful bar of 2 euros.
“These price increases are linked to the rebound in activity after the health crisis. Some sectors are experiencing unusual demand, and as the crisis has lasted for a long time, producers have reduced their production capacity and hampered investment. This is typically the case with oil, ”explains Xavier Timbeau, economist and director of the French Observatory of Economic Conditions.
In the food sector, it is the fresh vegetables which toast: + 11.3% in one year, as well as fish (+ 5.5%). Price increases linked to bad weather worldwide, which affected harvests. This is the case of durum wheat, the shortage of which in Canada will increase the price of pasta in French supermarkets. According to the expert, this additional cost linked to consumption is, for the moment, “not scandalous”, but the acceleration of inflation in the coming months could become worrying.
Above all, “for the most precarious households, this can weigh heavily on their budget”. When we know that energy and food are among the main expenditure items for the most modest households, these increases are likely to have immediate effects.
The government on the lookout
In an attempt to limit the consequences of inflation on the daily life of the French, Prime Minister Jean Castex announced the establishment of “exceptional social assistance of 100 additional euros” intended for the 5.8 million households who touch already the energy check.
A balancing act for the government which, seven months before the presidential election, does not want to make a mistake, because fuel was notably the trigger for the social crisis of the yellow vests in 2018. The executive should however continue to propose ad hoc depreciation measures, not wishing to legislate on prices at the pump, nor to increase the minimum wage, which the unions are demanding.
Xavier Timbeau wants to be reassuring, however: “The rise in oil prices is rather temporary”, he explains, assuring that “the market will be able to calm down” within a few quarters, or even a year. That caused by climate change, on the other hand, could be “more sustainable”, with consequences yet to be assessed.