French Economy Faces Stagflation Risk Amid Iran Conflict, Economist Warns

On March 31, Jin10 reported that Charlotte de Montpellier, an economist at ING, highlighted the stagflation risk France faces due to the ongoing conflict with Iran. According to Jin10, inflation rebounded in March while economic activity data weakened in the first quarter. The EU harmonized inflation rate rose from 1.1% in February to 1.9%, with energy inflation surging to 7.3%. Other indicators, such as a 1.4% decline in household consumption in February, suggest significant downside risks to French economic activity. These metrics indicate that the first-quarter performance may be weaker than expected, and the economy was already fragile before the conflict's impact became apparent. Montpellier noted, "Our forecast of 0.7% average growth for the year now seems overly optimistic."