FX.co ★ French consumers cut back on food spending due to inflation

Persistently high inflation comes as a heavy burden on consumers who have to adjust to it by cutting costs where they can. Thus, high prices in France have forced consumers to make massive cuts to their spending on essential goods. According to the National Institute of Statistics and Economic Studies (Insee), food purchases in France have dropped by a record 11.4% over the past year and a half due to surging inflation. Apparently, it is still a burning issue for the country as all measures taken earlier have failed to stabilize prices. Although the annual increase in food inflation in July was lower than in June, the prices of meat, milk, cereals, cheese, eggs, and vegetable oil have risen considerably. Since the end of 2021, French food expenditure has decreased by 11.4%. This is something that has never happened since the Insee began collecting this data in 1980. “Due to inflation, the French have changed their consumer habits: they first turned to discounts, price reductions, and retailers' brands,” BFM TV channel reported, citing the Insee. In late June, French Finance Minister Bruno Le Maire said that inflation would never return to pre-pandemic levels. The minister added that this was due to France's economic course towards the nationalization of a number of key industries and actions to combat climate change. On the other hand, the French central bank predicts inflation to slow down to 2% in 2024 after hitting a peak in the first half of this year.