Oil, copper, gas, gold, wheat, containers… The rise in prices has been reversed for a few months. Investors fear a faster-than-expected return to recession.
Will the purchasing power law presented this Thursday to the Assembly be late? If inflation accelerated to 5.8% in June and should climb to 7% at the end of the year according to INSEE, wouldn’t the forecasts be too alarmist?
It is not impossible. First, we see it in our BFMTV price index as well as in our BFM Business trolley. Over a month, we observe a slight decrease. It is not a question of calling into question the real price increases on many products, particularly in fresh and frozen foods. But on a selection of products representative of consumer purchases, promotions soften the note.
Diapers, washing powder or expensive products such as pastis benefit from significant discounts in many stores.
Today, what really weighs down purchasing power is fuel. But for how much longer?
Oil below $100
You have to be very careful, we have seen a stabilization or even a drop in oil prices for several weeks. The price of Brent, which had climbed to more than 130 dollars last March and which some analysts saw rising to 200 dollars, has since largely declined. The price of a barrel fell back below 100 dollars this week, a drop of 23% since March.
Same trend for natural gas, gold and especially copper. The latter is an economic indicator prized by economists. Copper is present in our cars, our telephones, our planes, our telephone lines… But this copper, if it remains in a situation of shortage, has seen its price fall by 22% in the last four months.
In food also we land. The price of a tonne of wheat which had swelled to more than 438 euros in May has since fallen by 25%.
Finally, consider containers for freight. Their rental price had exploded in 2021. However, since the peak in September 2021, their prices have fallen by 40%.
All these cuts should logically have an impact on consumer prices in the coming weeks. Provided however, concerning certain products such as oil, that the euro stabilizes against the dollar. Oil purchases are indeed denominated in US currency. The fall in the euro over the past few weeks is offsetting that of oil prices.
The recession after inflation
But is this good news for purchasing power? Not necessarily. Because if commodity prices are falling, it is because investors are anticipating a global recession. The World Bank has revised its global growth forecast to 2.9% (1.2 points less than in January). Who says recession says contraction of demand and therefore price cuts.
Fears also about the Covid. The resurgences in Europe, the “zero-Covid” policy in China with confinements which weigh on consumption and therefore on the anticipated demand of companies and investors.
Exit inflation earlier than expected to enter recession. Maybe not such good news for purchasing power.
#raw #materials #falling #inflation
