15 January 2020

2020- n° 9

Consumer prices slowed down on average from 2018 to 2019 Price Index – Annual average rates of change - year 2019

On average over the year, consumer prices slowed down in 2019 after three consecutive yearsof acceleration. The inflation was up by 1.1% after +1.8% in 2018. Excluded tobacco, consumer prices were alsoless dynamic than in 2018: +0.9% in 2019 after +1.6% in 2018. The drop in inflation resulted, on the one hand, from a slowdown in the prices of energy, services and tobacco, and, on the other hand, from an accentuated drop in manufactured product prices. Contrariwise, the acceleration in food prices moderated the global decrease. Core inflation was stable in 2019, to +0.8% as in 2018.

After an acceleration in 2018, energy prices sharply slowed down in 2019 (+1.9% on overage after +9.7%), in the wake of petroleum product prices (+0.6% after +14.7%) and gas prices (+2.4% after +12.5%). Petroleum products tax being stable and annual average Brent price being almost stable too, motor fuel prices barely rose on average over the year in 2019 (+0.2% after +13.2% in 2018) and those of heating fuel sharply slowed down (+1.7% after +22.3%). Contrariwise, electricity prices gathered pace to +3.9%, after +1.3% in 2018.

In 2019, the prices of the manufactured products dropped more than in 2018 (−0.6% on average after −0.2%). The prices of clothing and footwear edged down by 0.3% after a very slight rise in 2018 (+0.1%): those in clothing fell more sharply (−0.6% after −0.2%) while those of footwear slowed down after a rebound in 2018 (+0.4% in 2019 after +1.0%). The prices of “other manufactured products” slightly dropped (−0.1% after +0.2%), due to a downturn in sustainable goods prices (−0.1% after +0.3%): those of household appliances (−2.1% after −1.6%), those of audio-visual, photographic and information processing equipment (−3.4% after −2.3%) and those of telephone equipment (−10.4% after −7.4%) fell more. The downturn in the prices of tools and equipment for house and garden (−0.6% after +0.3%) and the slowdown in car prices (+0.7% after +1.4%) also contributed to this downturn. The prices of furniture and furnishings slightly rose to +0.2%, after a stability in 2018. Moreover, health product prices fell more than in 2018 (−2.8% after −2.3%), due to an accentuated drop in pharmaceutical products prices (−3.7% after −3.1%) and a downturn in hearing aids prices (−0.3% after +0.1%) withthe implementation of the first part of the “100% healthy” basket.

Health service prices barely edged down in 2019, after a slowdown in 2018 (−0.1% on average after +0.9% in 2018 and +1.3% in 2017), simultaneously with the implementation of the first part of the dental convention signed in 2018, which stipulated a revaluation of current dental treatments and a drop in the prices of dental prostheses.

The drop in communication services prices continued in 2019at a pace near to that in 2018 (−1.1% on average after −1.0%): telecommunication services prices dropped more (−1.7% after −1.5%) while those of postal services went up again sharply after a revaluation in fees in January 2019 (+6.6% after +6.8%).

In 2019, transport service prices were barely less dynamic than in 2018 (+0.7% after +0.8%). Airfares gathered pace (+0.9% after +0.5%). Contrariwise, the prices of other transports services slackened or edged down: those of passenger transport by road (bus, taxis, etc.) rose by 1.4% in 2019 after +1.6%, those of combined passenger transport by 0.4% after +1.4% and those of passenger transport by rail dropped by 0.3% after +0.3% in 2018.

The prices of the “other services” slightly slowed down in 2019,after two years of acceleration (+1.6% after +1.8% in 2018 and +1.4% in 2017). The lesser dynamism in the prices of accommodation services (+1.4% after +2.2%), package holidays (+1.9% after +12.9%) and insurance (+1.6% after +1.8%) was partly offset by an acceleration in social protection prices (child care services, retirement homes for elderly persons...: +1.7% after +1.3%) and in the prices of recreational and cultural services (+1.7% after +0.9%).

In 2019, the prices of housing service (actual rentals, supply of water and refuse collection fees) accelerated after six years of slowdown: +0.4% on average, after +0.1% in 2018 and +0.4% in 2017. Actual rentals rebounded to +0.4%, after a 0.3% decrease in 2018 due to a drop in social rental prices together with these in individual housing benefits. The prices of the other housing services − mainly supply of water and refuse collection fees − were sharply less dynamic than in 2018 (+0.3% after +1.3%).

After a +14.2% rise between 2017 and 2018, tobacco prices also surged in 2019: +10.6% on overage over the year, again due to a tax increase.

Food prices accelerated in 2019 for the fourth consecutive year (+2.5% after +1.9%). The prices of food products except fresh foodstuff rose more in 2019 (+2.1% in 2019 after +1.3% in 2018), simultaneously with the entry into force of the law “Agriculture and food” and with the pork meat crisis: the prices of alcoholic beverages (+2.6% after +1.1%), non-alcoholic beverages (+2.0% after +1.0%), meat (+2.5% after +1.3%), milk, cheese and eggs (+2.5% after +2.0%), bread and cereals (+1.5% after +1.1%) gathered pace whereas those of oils and fats slowed down (+4.8% in 2019 after +7.0%). Fresh food prices slowed down in 2019 (+4.3% after +5.2%): those of fresh fruits (+0.3% after +6.6%) and fresh vegetables (+6.0% after +7.1%) slowed down whereas fresh fish prices (+4.0% after +2.1%) were more dynamic.

Depending onits own consumption structure, each household was subject to a global inflation more or less pronounced. Thus, in 2019, households under 30 years of age suffered the lowest price increase (+0.9% compared to +1.1% for all households). Moreover, the inflation was 0.1 points higher for housing owners. Contrariwise, for the executives and the households in the highest decile of standard of living, the inflation was slightly below that of all households (by 0.1 points).