France Faces Cost of Living Emergency... Record High Inflation at 5.8%

Energy Prices Surge 28% Including Crude Oil and Gas

[Asia Economy International Department Reporter] France's inflation rate for May was preliminarily estimated to have increased by 5.2% compared to the previous year, the National Institute of Statistics and Economic Studies announced on the 31st of last month (local time).

[Image source=Yonhap News]

Energy prices, including gas and crude oil, rose by as much as 28% year-on-year due to restrictions on purchasing Russian energy, and food prices also increased by 4.2%.

AFP news agency reported that this is the first time since 1985 that France's inflation rate has exceeded 5%. When converted to the Harmonized Index of Consumer Prices (HICP) used by the European Central Bank (ECB), it stands at 5.8%, which Bloomberg News analyzed as an all-time high.

Since Russia's invasion of Ukraine, European countries including France have been struggling with soaring inflation.

Germany, which leads the European Union (EU) economy, is expected to see its consumer price index for May rise by 7.9% year-on-year, the highest in about 50 years.

Amid record inflation, the economy contracted in the first quarter, raising concerns about stagflation. This has poured cold water on France's hopes for economic recovery after lifting most COVID-19 pandemic restrictions.

The National Institute of Statistics and Economic Studies announced on the same day that the GDP growth rate for January to March this year was -0.2%, revising downward last month's forecast which had predicted stagnation at 0%.

Earlier, Eurostat, the EU's statistical office, announced that the consumer prices in May for the Eurozone, consisting of 19 member countries using the euro, are expected to rise by 8.1% year-on-year (flash estimate). AP news agency reported that this is the highest since related statistics began in 1997.

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