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Record inflation & French legislative elections

Following President Emmanuel Macron’s re-election in April, legislative elections are just a few weeks away, and the country’s inflation figures are concerning. 

Record inflation and sluggish growth are threatening French purchasing power, as the country prepares to go to the polls again on June 12 and 19. 

From January to May, inflation reached 5.2 percent, “due to an acceleration in the prices of energy, services, food, and manufactured goods,” according to France’s Institute of Statistics and Economic Studies (INSEE). 

Many analysts even predict a strong and long-term post-pandemic recovery. They were correct, as GDP increased by 7% in 2021, while the unemployment rate fell to 7.3 percent, the lowest since 2008.

As the economy began to recover in the second half of 2021, the supply-demand gap for energy products widened, and inflationary pressures increased. 

This disparity “has resulted in a rise not only in the price of oil, but also in the price of gas and basic necessities,” according to a recent report by OFCE, a French economic think tank. 

Supply chains are under strain, and raw materials, particularly wheat, are becoming scarce. As a result, supermarket prices for pasta, rice, and dried fruit have risen by 15%, 2.4 percent, and 3.4 percent, respectively. 

According to the government, the solution to the crisis lies in reviving investment and innovation.

The supply-demand gap for energy products widened as the economy began to recover in the second half of 2021, and inflationary pressures increased. 

According to a recent report by OFCE, a French economic think tank, this disparity “has resulted in a rise not only in the price of oil, but also in the price of gas and basic necessities.” 

Raw materials, particularly wheat, are becoming scarce, putting pressure on supply chains. As a result, the prices of pasta, rice, and dried fruit in supermarkets have risen by 15%, 2.4 percent, and 3.4 percent, respectively. 

The government believes that reviving investment and innovation is the key to resolving the crisis.

Trouvé believes that there is an urgent need to freeze energy and essential goods prices in France first, and then across Europe. 

The left-wing candidate also wants to raise the minimum wage and tax large corporations’ profits, which she calls “a real vector of inflation in Europe.” 

Although the causes of inflation are well understood, potential solutions are politically sensitive. 

Finding the appropriate measures entails solving a complex equation with no obvious solution. With legislative elections coming up, both the government and the opposition will have to act quickly. 

With living costs rising in recent months, the government will undoubtedly avoid a return to austerity, but it also does not want to be seen as inactive.

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