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France Inflation Slows On Energy Cost

France's inflation slowed markedly in April reflecting a sharp fall in energy prices and slowdown in services cost growth, preliminary estimate from the statistical office Insee showed Thursday.

Another report showed that consumer spending declined at a record pace in March as households curbed their consumption amid coronavirus lockdown.

Consumer price inflation eased to 0.4 percent in April from 0.7 percent in the previous month.

Food price growth accelerated to 3.7 percent, while the fall in energy prices deepened to -8.5 percent. Services prices grew at a slower pace of 0.7 percent.

On a monthly basis, consumer prices edged up 0.1 percent in April, as seen in the prior month.

Inflation, based on the harmonized index of consumer prices, came in at 0.5 percent versus 0.8 percent in March. The rate was forecast to fall to 0.1 percent.

Month-on-month, the HICP was up 0.1 percent, the same rate as reported in March.
The Insee said the covid-19 impacts the quality of the April data as collection on the field has been adjourned since March 16.

Another report showed that producer prices in the domestic market declined 1.7 percent on month in March, following a 0.9 percent decrease in February. Year-on-year, producer prices fell sharply by 2.7 percent after easing 1.2 percent.

In a separate communiqué, the statistical office said household consumption logged its biggest fall since the time series began in 1980.

Household spending plunged 17.9 percent on month in March, following a 0.5 percent decrease in February and a 1.2 percent fall in January. Economists had forecast only 5.5 percent fall for March.

Spending on transport equipment decreased sharply by 60.4 percent and that on energy dropped 11.4 percent.

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