In May 2006, the consumer price index for all households in the whole of France rose by 0.4% as in the previous month (+0.1 % in May 2005).The year-on-year price increase was 2.1 % after +1.7 % in April.
The price index adjusted for seasonal variations showed a rise of 0.4% as in the previous month.
The underlying inflation indicator was stable after a rise of 0.2% in April. It rose 1.1 % year-on-year (+1.2 % last month).
In May, the consumer price index increase was mainly explained by rises in the price of petroleum products and town gas. That was combined with rises in prices of other services, of fresh produce and of health services. Prices of clothing and footwear, of foodstuffs except fresh produce and of other manufactures increased too.
Conversely, falls in price of transport and communication and of actual rentals, water supply and refuse collection, limited the rise of overall index.
Growth forecast raised
The Bank of France today raised its forecast for growth of the French economy in the second quarter to 0.7% from 0.6%.
Even if the economy did not grow, or contract, during the rest of the year, growth at the end of 2006 would be 1.6% - the so-called assured growth figure - the bank said.
The French central bank also reported that its index of French business confidence had risen to 111 in May from 106 in April. It reported business leaders as saying that industrial activity had rallied in May.