Inflation fell sharply in June, driven by the fall in energy prices, after several months of continuous increases.
Inflation fell again in June over one year, to 1.8%, after 2.4% in May, according to a first estimate revealed by the National Institute of Statistics and Economic Studies (Insee) on Tuesday. This is a clear decline, after four months of continuous rise in consumer prices caused by the war in the Middle East. This decline marks the first drop in inflation since the start of the year, as the rate falls below the symbolic 2% mark, reaching its lowest level since March.
The causes of the slowdown
This deceleration in inflation is primarily explained by the “sharp slowdown in energy prices, particularly those of petroleum products”, which have been falling constantly since mid-June and the memorandum of understanding concluded between Iran and the United States to end their conflict. At the end of last week, 95-E10 unleaded gasoline fell below 1.90 euros per liter on average (1.8842 euros), according to weekly government data. As for diesel, it was displayed on average at 1.8691 euros per liter, very far from the peak reached in mid-April, at more than 2.30 euros.
The sharp rise in inflation in spring 2026 was mainly explained by the acceleration in energy prices, particularly petroleum products, in a context of conflict in the Middle East. The blockage of the Strait of Hormuz led to a surge in oil prices.
In addition to energy, “the prices of services would also slow down over a year, but to a lesser extent, like those of food; the decline in those of manufactured products would increase, partly for calendar reasons, the June collection including more days of sales than last year”, add the national statisticians in their note.
In its latest economic report published in mid-June, INSEE expected inflation to be 2% in June over one year, linked to the decline in the prices of energy products, particularly oil, as well as a more sustained decrease in the year-on-year rate of prices of manufactured products. The institute also highlighted the one-off effect of the sales calendar, which was expected to push inflation down in June before an expected rebound in July.
Outlook for the coming months
INSEE sees inflation accelerating again from August until the end of the year, reaching 2.7% in December year-on-year.
In May 2026, inflation over one year was 2.4% according to INSEE. In April 2026, consumer prices increased by 2.2% year-on-year, after +1.7% in March. Over previous years, annual inflation amounted to +0.9% in 2025, +2.0% in 2024, +4.9% in 2023 and +5.2% in 2022.
