France's national public audit office has said the eurozone's second biggest economy could be significantly exposed to macroeconomic shocks, because of its €154bn public deficit and lagging public finances.
ADVERTISEMENTFrance's year-on-year inflation rate for July came in at 2.3%, up from 2.2% in June, in line with analyst expectations, according to INSEE, France. The rise was mainly because of energy prices increasing to 8.5% in July, up from 4.8% in June. Gas prices saw a marked surge, at 11.4% up from -10.8%.
However, services prices dropped to 2.5% in July, down from 2.9% in the previous month. Food prices also slowed down to 0.5% in July, from 0,8% in June. Tobacco prices remained stable at 8.7%, with manufactured goods' prices also seeing no change.
Other services' prices also fell in July, coming in at 3.8%, down from 4% in the previous month. This was mainly driven by the falling prices of cultural and recreational services, at 4.3% in July down from 5.2%. Insurance services' prices also dipped to 7.4% in July, from 7.9% in the previous month.
Conversely, the prices of care and beauty and hairdressing salons increased 2.2% in July, back to the same pace as June.
The month-on-month inflation rate for July came in at 0.2%, up from 0.1% in June, as well as above market estimates of 0.1%. The increase was mainly because of a seasonal hike in accommodation and transport prices, as well as a rise in gas prices.
France has also released its unemployment figures for the second quarter of the year, which came in at 7.3%, down from the last three-month period's 7.5%. This was also a step down from analyst estimates, also of 7.5%.
French economy could be exposed to economic shocks
France's national public audit office, Cour des Comptes, has recently said that the eurozone's second biggest economy could potentially be significantly exposed to macroeconomic shocks, because of its €154bn public deficit and lagging public finances.
This is an increase from the €125.8bn public deficit seen in 2022. The audit office has emphasised that it is vital for France to take decisive moves to cut the deficit as soon as possible, as it could get in the way of other important investments and spending and could leave the country vulnerable in case of new macroeconomic turmoil.
The Paris Olympics may have gone a significant way to boosting the French economy. However, there is still considerable political uncertainty in the country, following the recent elections, which has also unsettled French stock markets.
