ECB’s Villeroy Sees Signs Inflation Has Turned Corner With ‘Spectacular’ Change in Price Dynamics

9 June 2023

By Xavier D’Arcy – FRANKFURT (Econostream) – France is seeing a spectacular slowdown in prices in the manufacturing and services sectors, European Central Bank Governing Council member Francois Villeroy de Galhau said on Friday.

In an interview with Radio Classique, Villeroy, who heads the Banque de France, said that analyses were showing that inflation was passing its peak in France and the Eurozone.

‘The good news is that there is a change in the trend of price rises on the part of firms’, he said, referring to Banque de France’s monthly business survey published on Thursday. ‘If I look at industry, the change [in pricing behaviour] is really quite spectacular’, he said, with 10% of businesses increasing their prices in May, down from 50% a year ago. ‘So inflation is really slowing down, and we are seeing the same trend in services’, he said.

‘This confirms our analysis that we are in the process of passing the inflation peak in France and in the euro area’, he added.

‘We expect growth to be slightly positive in the second quarter’ in France, he told listeners, adding that ‘economic growth over 2023 as a whole will be at least equal to what we forecast in March, i.e. at least 0.6%.’