French HICP likely to average 0.6% in 2016, 1.6% in 2017

France's HICP inflation is unlikely to change. It is expected to confirm the flash estimate of 0.4% y/y in January 2016, as compared with December's reading of 0.3% y/y. According to the January flash estimate, the energy component rebounded on an annual basis to -4% from -4.7%, whereas food inflation eased to 0.4% y/y from 0.6% y/y, mainly due to weaker fresh foodstuffs prices.

Manufactured product prices, in the core figure, fell in January on a monthly basis, because of the winter sale. However, on an annual basis, it rose to -0.1% from -0.3%, according to flash estimates. Core services eased slightly to 1% y/y in January from 1.1% y/y in December. French CPI, excluding tobacco, is expected to print at 124.80 in January 2016.

"Looking ahead, French HICP inflation is set to average 0.6% in 2016 and 1.6% in 2017. We expect the core metric to be 1.0% in 2016, before rising to 1.3% in 2017", says Societe Generale.