French consumer price inflation slows to 0.3%; budget deficit narrows

France's consumer price inflation decelerated in January, provisional data published by the National Institute of Statistics & Economic Studies showed on Tuesday.

The consumer price index rose by 0.3% in January from a year before, the annual rate of inflation slowing from 0.8% in December.

Notably, energy prices fell 7.8% on-year in January, accelerated from a 6.8% decline in December. At the same time, food prices were 1.9% higher in January, picking up from a 1.7% rise in December. Fresh food prices rose 1.4% on-year in January after a 0.4% decline in December.

On-month, consumer prices in France fell 0.3% in January after a 0.1% rise in December.

"This fall in prices should be explained by the seasonal fall in prices of manufactured goods, due to sales in clothing and footwear," Insee said.

On a harmonised level, allowing for EU-wide comparison, consumer prices rose 0.4% on-year in January, decelerating from 0.7% inflation in December. They declined 0.4% in January from December after rising 0.1% in December from November.

Insee will publish final January CPI data on February 18.

Separately, the Ministry of Economics, Finance and Industrial & Digital Sovereignty said France's government deficit narrowed in December.

The budget deficit decreased by 20% to EUR124.74 billion in December from EUR155.41 billion in November. It was 20% lower than EUR156.30 billion in December 2024.

France adopted a 2026 government budget on Monday following months of fraught negotiations after Prime Minister Sebastien Lecornu survived the latest in a string of no-confidence motions, AFP reported.

Lawmakers rejected two no-confidence motions from the hard-left and far-right parties tabled after the premier on Friday forced his cost- saving budget through Parliament without a vote for the third and final time.

The outcome cleared the way for the budget's final approval after four months of political deadlock over government spending.