PARIS (Reuters) – The pace of inflation over one year slowed in March in France, due in particular to a decline in energy prices, while food prices continue to accelerate at high levels, according to a first estimate published Friday by INSEE.

The consumer price index (CPI) rose by 5.6% over the twelve months to the end of March, against 6.3% at the end of February. Economists polled by Reuters had forecast +5.5%.

Inflation continues to be driven by rising food prices, INSEE said in a press release, while energy prices are slowing down due to a further drop in the price of petroleum products.

Food prices would increase by 15.8% year on year in March, according to the statistical institute, accelerating further after having jumped by 14.8% in February.

“This weighs on household consumption (in February, food consumption thus remained on the decline: -1.2% in volume compared to January)”, commented Julien Pouget, head of the economic situation department of the ‘Insee on Twitter.

Over one month, inflation calculated according to French standards increased by 0.8%, while INSEE forecast in its latest economic report on an increase of 0.5% compared to February, against 1.4% it a year ago.

The consumer price index harmonized according to European HICP standards, which allows comparisons with other euro zone countries, is up 6.6% over one year at the end of March (compared to 7 .3% at the end of February), a level slightly above expectations at 6.5%.

This slowdown comes earlier than expected by the Banque de France, which for its part estimated that HICP inflation should start to slow by June, and reach an average of 5.4% this year.

The final consumer price index for March, the only one valid for the indexation of private contracts, life annuities, alimony or the evolution of the Smic for example, will be released on April 14.

(Written by Kate Entringer, edited by Tangi Salaün and Blandine Hénault)

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