The price hike will last. France should “get out of the peak of inflation at the end of 2023”, assures the Minister of the Economy Bruno Le Maire in an interview published this Wednesday in Le Figaro. According to INSEE’s first estimate, inflation accelerated again in France in May, to 5.2% over one year, thus exceeding the 5% mark for the first time since September 1985.
“The hardest we are there”, thus analyzed the minister. “It will last several months but I do not anticipate levels of inflation like in Greece or the Netherlands”, he added on France Inter this morning. Prices are currently being driven up by the situation on the energy markets as well as that of the food markets, he says.
If Bruno Le Maire expects a decline, he considers that it is unlikely to return to the level before the health crisis: “We will then have a structurally higher level of inflation, around 2%, due the regionalization of value chains and the very high cost of the energy transition”, continues the Minister.
Calls for wage increases
“The fight against inflation must be led by everyone. Companies – and some already do – can also participate, by mobilizing value-sharing tools such as the Macron bonus, participation or profit-sharing, ”adds Bruno Le Maire.
“Those with sufficient leeway can also increase wages. They can also lower prices,” he adds. The comparison between France and its European neighbors remains however rather flattering, according to Bruno Le Maire. German inflation notably recorded a new record on Monday (+7.9% over one year in May).
In addition, Le Maire ensures “to revalue all the basic retirement pensions in the law that we will present in July”, “in a reasonable order of magnitude”, and while an automatic revaluation of 1% has already taken place in January and that the government has the objective “of a 1,100 basic pension with the pension reform”.
No risk of recession
Who on the specter of recession? Asked about this subject while the war in Ukraine is destabilizing supplies of raw materials and the Covid-19 is jamming the Chinese productive machine, Bruno Le Maire sweeps away: “I do not believe in a risk of recession”, he retorts. on France Inter.
The Minister of the Economy finally expressed his wish to see the European Central Bank (ECB) take action against inflation: “There is the State with protective measures (…) and monetary policy. It is the responsibility of the ECB to take the necessary measures gradually, without brutality,” he said, while the ECB wishes to gradually raise key rates.