Inflation in France has reached its lowest level in five years.

Inflation Rates in France Show a Decrease

According to data from the French Statistics Institute Insee, the preliminary consumer prices for the January 2026 period increased by only 0.4 percent compared to the previous year. This marks the lowest growth rate recorded since December 2020.

Below Bloomberg Estimates

Last month, the inflation increase was at 0.7 percent, while analysts had expected 0.6 percent. This situation highlights how France has shown a difference in inflation rates among the largest economies in the Eurozone.

Impacts on the European Central Bank

It is not expected that these low inflation figures in France will raise significant concerns regarding the European Central Bank (ECB)'s determination of borrowing costs at the meeting in Frankfurt. As inflation rates across the Union hover around 2 percent, the likelihood of changing deposit interest rates is also declining.

Regional Differences

Inflation rates in the Eurozone are close to the targets set by the ECB. For example, inflation in Germany was recorded at 2.1 percent, while in Spain it was 2.4 percent.

Internal Market and Pricing Policies

Bank of France Governor François Villeroy de Galhau warned that downward price risks in Europe are as significant as potential upward risks. Additionally, the recent rise of the euro is said to potentially create additional pressure on prices.

Factors Leading to the Decrease in Inflation

In January, price decreases in energy products and particularly in manufacturing items such as clothing and footwear were among the primary factors positively influencing French inflation.