Consumer prices in France picked up in March, climbing 1.7% year-on-year, up from 0.9% in February, according to the latest data published on Tuesday by the French National Institute of Statistics and Economic Studies (Insee).

The uptick in inflation is largely driven by higher oil prices amid the Middle East conflict. Energy inflation surged to 7.3% year-on-year, after falling 2.9% in February. Gas price hikes, however, have yet to appear in consumer prices due to existing contract arrangements.

Excluding energy, inflation in France remains relatively subdued. Food price growth eased to 1.8% year-on-year from 2% in February, while prices for manufactured goods fell 0.6%, following a 0.2% decline the previous month, according to a report by Investing.com.

Meanwhile, services inflation inched up slightly to 1.7% from 1.6%.

Early 2026 activity data points to a softening French economy. Services output fell 0.6% month-on-month in January, retail sales volumes remained flat, and household consumption shrank 1.4% in February after a 0.4% gain in January.

In addition, the harmonised consumer price index, which allows for EU-wide comparisons, increased 1.9% year-on-year in March, up from 1.1% in February. On a month-to-month basis, it grew 1.1%, following a 0.7% rise the previous month, according to the Insee report.

Inflation in France is now expected to average around 2% this year, up from a pre-conflict forecast of 1.3% for the harmonised index.

In the meantime, ING’s March projection of 0.7% full-year growth, down from an initial 1% forecast, may prove optimistic given the current slowdown.

The government had aimed for a budget deficit of around 5% this year, assuming 1% GDP growth. Recent developments, however, could weigh on tax revenues and further strain public finances.