15 June 2016

2016- n° 152

Consumer prices increased by 0.4% in May 2016, they were stable year-on-year Consumer price index - final results - May 2016

In May 2016, the Consumer Prices Index (CPI) rose by 0.4% after +0.1% in April. Seasonally adjusted, it increased also by 0.4%. Year-on-year, the CPI was stable, after −0.2% in April.

This rise in consumer prices in May came mainly from a price upturn in food, especially in fresh foodstuffs, and from a strengthening in petroleum product prices for the third month in a row. The increase in prices of other goods and services was very moderate.

In May 2016, food prices grew by 1.0% over the month (as year-on-year) after a stability in April. This acceleration came mainly from the seasonal rise in fresh foodstuff prices, more pronounced in May this year (+7.5%) than last year (+3.2%). In particular, prices of fruit increased at almost twice the growth rate of last year (+20.4% in May 2016 compared with +10.5% in May 2015) while new season products appeared. However, a portion of this difference (almost three pourcentage points) arose from a new method of calculation implemented through the CPI change of base (see explanatory note for details). In contrast, prices of processed products have been unchanged since the beginning of the year; their year-on-year rise remained limited to 0.2% for the sixth month in a row. Trends are more contrasted depending on the product. So, sugar prices declined by 4.6% year-on-year, those of ready-made meals by 3.9%, whereas those of dried fruits expanded by 4.7% and those of olive oil by 4.1%.

The energy prices rose sharply in May (+2.2%) after more moderate increases during the last two months (+0.3% in April and +0.9% in March). However, they remained far below their level of last year (−5.7%). This strenghthening was due to petroleum products (+4.1%; −10.4% year-on-year), in the wake of the rise in crude oil prices. Conversely, gas prices were still down (−0.6%; −10.5% year-on-year) while electricity fares were stable (+4.1% year-on-year).

In May 2016, services prices grew slightly (+0.1% after +0.2% in April; +1.0% year on year as in April). In hotels and restaurants, prices rose seasonally at the beginning of the summer season (+0.3% over one month; +1.8% year-on-year). Furthermore, mobile phone services continued to increase in May (+1.4% over one month; +4.7% year-on-year). On the other hand, package holidays prices dropped after spring break (−3.6% over one month; +1.6% year on year), as airfares (−3.1% over one month; −7.3% over one year). Insurance premiums went down slightly (−0.4% over one month; +1.7% year on year) due to discounts.

In May 2016, prices of manufactured goods rose slightly (+0.1%) but remained down year-on-year (−0.6%). Clothing and footwear prices increased at a faster pace than in April (+0.8% after +0.4%; +0.2% year-on-year), with the launch of the summer collections. In addition, prices of the other manufactured products grew slightly in May (+0.1%; −0.1% year on year) due to the end of discounts, particularly for furniture and furnishings.

In May 2016, the core inflation indicator (ISJ) grew by 0.1% for the third month in a row. Year-on-year, it increased by 0.7% (after +0.6% in the two previous month). The Harmonised Index of Consumer Prices (HICP) expanded by 0.5% over a month in May. Year-on-year, it increased by 0.1% after three months of decline (−0.1%).

Compared to the provisional estimates published at the end of last month, the annual rates of change in the CPI and HICP were revised upwards by 0.1 percentage points in May (respectively from −0.1% to 0.0% and from 0.0% to +0.1%). These revisions came mainly from integration of information in the meantime leading to raised the price rise estimates for petroleum products and for telecom services.