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- CNBC Deflation is a decrease in the general price level of goods and services. It is the opposite of inflation, which is an increase in the general price level. Deflation occurs when the inflation rate falls below 0 percent. The most extreme form of deflation is a prolonged period of falling prices, called a deflationary spiral. This occurs when the deflationary forces become so strong that they cause a continuing fall in prices, leading to a decrease in demand, which leads to even lower prices and so on. This can be very damaging to an economy, as it reduces economic activity, leading to job losses and even a recession. Deflation can be caused by a decrease in the money supply, a decrease in government spending, or a decrease in aggregate demand. The most famous example of deflation was the Great Depression of the 1930s.
The Food & Beverages category saw inflation ease by 95 basis points month-on-month, settling at 2.88%, largely driven by continued deflation in vegetable prices.
Producer prices within France's domestic market saw a decrease of 0.6% from the previous month in March 2025, following a revision in February's figures that also showed a 0.4% drop. This marks the second consecutive month of deflation. Prices for manufactured goods declined by 0.3%, compared to a 0.2% increase in February, with significant reductions observed in sectors such as coke and refined petroleum, which plunged by 9.3% compared to a 2.9% decrease previously. Additionally, costs associated with mining, quarrying, energy, and water continued to decrease, though at a reduced rate than the month before, with a fall of 1.6% as opposed to February's 1.7%. Annually, producer prices recorded a 0.6% decline in March, improving from a revised 1.2% decline observed in February.The material has been provided by InstaForex Company - www.instaforex.com
In April 2025, France's annual inflation rate remained steady at 0.8% for the third consecutive month, consistent with projections, marking its lowest point since February 2021. While there was a notable decrease in energy costs, dropping to -7.9% compared to -6.6% in March, this was balanced by an increase in food price inflation, which rose to 1.2% from 0.6%, with fresh products experiencing a rise from 3.8% to 4.0%. Inflation for services held steady at 2.3%, and tobacco at 4.1%, whereas manufactured goods continued to experience deflation at -0.2%. On a monthly scale, consumer prices increased by 0.5%, the most significant rise since last August, exceeding the anticipated 0.3%. This increase was predominantly driven by escalating prices in services, especially transport, and in food.The material has been provided by InstaForex Company - www.instaforex.com
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