The finance minister of France, Bruno Le Maire, has said that while the country has nearly overcome the inflation crisis of the past year, it is likely to face stronger price pressure in the coming years. Speaking on Radio J, Le Maire said that the efforts of the French government to relocate the industry domestically will have a "structurally inflationary" effect. Additionally, the cost of transitioning to renewable energy sources will also impact prices in the years to come. In the short-term, Le Maire pointed to painful increases in credit costs that are arising as a result of the European Central Bank hiking rates and the government pulling back some fiscal support.
Data that is due to be released this week will likely show that consumer-price growth in France slowed to 5.4% in June, marking the lowest level in over a year. Despite this positive news, the Finance Minister warned that the country would continue to face difficulties in keeping inflation levels in check.
Le Maire stated that the country is making progress in the fight against inflation, but that it required difficult and challenging choices. While France has been able to overcome the inflationary crisis of the past year, it will need to remain vigilant in order to keep inflation levels under control in the years to come. Overall, the Minister's comments suggest that France is bracing itself for an extended period of elevated inflation that will require significant policy decisions in order to resolve.