Ukraine Conflict: Inflation forecast in France at more than 5% in 2022

Ukraine Conflict: Inflation forecast in France at more than 5% in 2022
By Faisal Ismail 11:05 pm on 03/09/2022 (updated on 11/69/03/2022)

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Kiosk 360. In the aftermath of the crisis caused by the Kovit-19 epidemic, the Ukrainian conflict will have repercussions on the French economy as well. OFCE economist Matthew Blaine predicts inflation will be above 5% in 2022. This article is a press review of the La Tribune website.

The rise in energy prices is already clear, but this is only the beginning. Although the peak of inflation will be considered temporary, as a result of the post-Covit-19 recovery, the Ukrainian conflict will remain strong over time and, above all, as expected by Matthew Blaine. , French economist interviewed by the Observatory for Economic Conditions (OFCE) site Gallery March 9.

Moreover, the purchasing power of French families will be severely affected. “If pensions, the social minimum wage and the minimum wage are coded with inflation, this does not apply to wages,” the expert points out. Although revenue is expected to increase by 2 to 3%, “companies do not need to go beyond that”.

For this expert, inflation, currently at 3.6%, is expected to cross 5% in the coming weeks. Faced with a situation unknown to the French for decades, the government must act and “absorb this increase”. “If the pensions of 16 million retirees need to be increased by a few points to reach 5%, it is not neutral …”, notes Matthew Blaine.

Despite the creation of more than 700,000 jobs in France last year, unemployment is set to rise. “In this environment, companies are less likely to invest and should be more cautious in hiring,” he warns. To be continued: “As prices rise, so does consumption. We will spend less. Fearing the future, the French are less likely to go to restaurants, to go out, to restrict purchases, and to act with caution. So that the function is guaranteed to be weakened. According to Matthew Plane, it is permanently taking the form of an economic shock.

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By Faisal Ismail

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