Inflation: the new forecasts for 2023


The year 2022 was marked by the return of inflation. Economists and consumers alike have seen it: prices are skyrocketing. At the end of this year, inflation crossed the 10% threshold in the countries of the euro zone (Eurostat figures). France is more spared than other countries thanks to the implementation of the energy shield which limited inflation to 6.2% according to INSEE. Much better than in Germany (11.3%), Hungary (23.1%) or the Baltic countries (more than 21%).

But in France, the real locomotive of this inflation is food products. Meat, fish, cereals, vegetables and groceries increased by 12.5% ​​at the end of December. It is explained by the rise in the price of oil necessary for transport and which is used in the composition of several fertilizers. Central banks have tried to intervene by tightening interest rates, but the effects are struggling to materialize and economists are counting on a peak in inflation in the first half of 2023. Here are the details.

All good things come to an end and “inflation will continue and accelerate” at the start of 2023, warns Stéphane Colliac, economist at BNP Paribas, interviewed by Le Monde. In question, the government discount of 10 cents at the pump which will end, the price of gas which will automatically increase by 15% in January and electricity will undergo the same increase in February. The SNCF and the RATP have also announced an increase in their prices and the negotiations between large retailers and producers promise a new surge in prices. Smokers will see the price of a pack of cigarettes increase by 50 cents in March. Further increases will then follow in the spring.

From spring 2023, there should be a slowdown in the rise in prices thanks to the fall in raw materials, the diversification of energy supplies and the effect of monetary policy.

But this does not mean a stop: the increase should be around 5.5% in the middle of the year, according to INSEE. The Banque de France does not see a return to normal before the end of 2023, around 2%. Prices will therefore not fall, they will increase more slowly. A situation that will also be found outside our borders.

Olivier Garnier, director general in charge of studies at the Banque de France, told Le Monde that “the world is entering a new inflation regime”. After years of great moderation marked by globalization, a very flexible supply of products and services and abundant savings, the way prices are determined is changing. The increase in energy prices due to climate change and the aging of the population make supply less flexible.

But difficult to make predictions: if, for example, China ended its zero Covid policy, it would revive its domestic demand and, in fact, raise prices. On the other hand, if the factory of the world were to go back to full capacity and once again supply products to the whole planet, it could bring prices down.