What Is the Inflation Rate in France?

Inflation is the rate at which the general level of prices for goods and services rises, leading to a decrease in purchasing power. This means a unit of currency buys fewer goods and services over time. Understanding inflation is important for household finances, as it impacts the cost of living and the real value of savings. It also plays a significant role in broader economic stability, influencing wages, interest rates, and investment decisions.

France’s Current Inflation Rate

France’s annual inflation rate remained stable at 1% in July 2025, mirroring the rate observed in June and aligning with preliminary estimates. This figure, derived from the national Consumer Price Index (CPI), indicates that prices for a typical basket of goods and services were, on average, 1% higher than in July of the previous year. For consumers, this translates to a slight increase in the cost of living.

The Harmonised Index of Consumer Prices (HICP), which allows for comparison across European Union countries, also held steady at 0.9% year-on-year in July. On a monthly basis, consumer prices in France saw a 0.2% increase in July, following a 0.4% gain in June. This monthly rise was primarily influenced by seasonal factors, such as higher service charges in transportation and accommodation.

An analysis of contributing factors reveals varied price movements across different sectors. Energy prices declined by 7.2% year-on-year in July, largely due to a high base effect from a surge in gas prices in July 2024. In contrast, food prices rose by 1.6% in July, while service prices accelerated to 2.5%. Services, which constitute the largest weight in France’s consumer price index at 48%, significantly impact the overall inflation rate.

Measuring French Inflation

France employs two primary indices to measure inflation: the national Consumer Price Index (CPI) and the Harmonised Index of Consumer Prices (HICP). The Institut National de la Statistique et des Études Économiques (INSEE) calculates both indices. The CPI serves as the official measure for inflation within France, reflecting the average change in prices of goods and services consumed by French households.

The CPI is instrumental for domestic economic policy, as it is used to index various private contracts and the national minimum wage (SMIC). In contrast, the HICP is a standardized index developed for consistent cross-country comparisons within the Eurozone and the broader European Union. While sharing a similar methodology with the CPI, the HICP excludes certain country-specific expenditures, such as owner-occupied housing costs, to ensure uniformity.

Both indices rely on monitoring price changes within a “basket of goods and services” that represents typical household consumption. This basket is regularly updated to reflect evolving consumer spending habits. Price data for these items is collected from diverse sources, including field observations, tariffs, internet prices, and scanner data from retail outlets.

Historical Trends and European Context

France’s annual inflation rate of 1% in July 2025 represents a significant moderation from recent peaks. The country experienced a surge in inflation during 2022 and 2023, with annual rates reaching 5.22% and 4.88% respectively. This period of elevated prices was initially driven by rising energy costs, followed by increases in food prices.

However, inflation has since shown a rapid decline, with the rate falling to 2.00% in 2024 and continuing its downward trend into 2025. This disinflationary trend suggests a return to more stable price levels after a period of heightened volatility.

In the broader European context, France’s inflation performance in July 2025 stands out. The Eurozone’s annual inflation rate was 2.0% in July, consistent with the previous month, while the European Union’s overall rate stood at 2.4%. France’s HICP rate of 0.9% in July positions it among the countries with the lowest inflation within the EU, notably below the Eurozone average. For comparison, Germany’s HICP was 2.0% and Spain’s was 2.7% in the same month. France’s consistently lower inflation compared to the Euro area has been partly attributed to its domestic price subsidies and regulatory measures.