Inflation Expectations 2022Q3
Mise en ligne le 29 Septembre 2022
Les dernières parutions
Business leaders expect the rate of inflation to stabilise at 5% in one year and 3% over the three to five year horizon
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Business perception and expectations of inflation in France (consumer prices)
Our quarterly survey of inflation expectations (here defined as the increase in the consumer prices index - CPI), which is a module of the Banque de France's Business Survey, was carried out from 29 August to 6 September. In the third quarter of 2022, median inflation as perceived by business leaders is 6.0%, close to actual CPI. The median of their one-year inflation expectations is 5.0%, while their medium-term expectations - three to five years ahead - are significantly lower (median inflation of 3.0%).
Table 1: Business perceptions and expectations of the annual inflation rate (%)
| Q4 2021 | Q1 2022 | Q2 2022 | Q3 2022 | ||
| Median | Current Perceived Inflation | 2.6 | 3.5 | 5.0 | 6.0 |
| 1-year forward inflation expectation | 3.0 | 4.0 | 5.0 | 5.0 | |
| 3-5 year forward inflation expectations | 2.0 | 2.5 | 3.0 | 3.0 |
In the third quarter of 2022, while the median of perceived inflation rose by 1 percentage point, the one-year and long-term median inflation expectations remained stable. However, the gradual shift in opinions towards slightly higher values is continuing.
Chart 1: Change in annual inflation rate perceptions and expectations (median, %)
Current Perceived Inflation
1-year forward inflation expectation
3-5 year forward inflation expectations
Chart 2: Distribution of three to five-year inflation expectations (%)
% of responses
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Base wage growth expected by business leaders
Base wage growth expected by business leaders
While business leaders anticipate an increase in consumer prices of 5.0% over the coming 12 months, they expect base wage growth in their firms of 4.0% during the same period, which represents a significant increase in expectations from the previous quarter (3%).
Chart 3: Change in one-year basic wage expectation (median, %)
This survey was carried out between 29 August to 6 September on a representative sample of 1,700 business leaders. The survey covers three major market sectors of the economy and firms of all sizes from every region of metropolitan France. The opinions of business leaders are obtained by telephone during the monthly interview conducted for the Monthly Business Survey and each business leader is questioned only once a year with regard to this module. Business leaders are asked four questions:
1 - As a percentage, what, in your opinion, is the actual rate of inflation in France?
2 - As a percentage, what, in your opinion, will the rate of inflation be in one year in France?
3 - As a percentage, what, in your opinion, will the rate of inflation be in three to five years in France?
4 - As a percentage, how, in your opinion, will the base wage (before tax, excluding bonuses) change in your firm over the coming 12 months?
Note that the base wage corresponds to gross salary before the deduction of social security contributions and payment of social security benefits. Bonuses and overtime are not included.
The data are trimmed at the 99th centile. To calculate the results, the replies are weighted based on the average number of employees and the relative importance of each firm within its sector, then by the respective weights of the professional branches in terms of value added at the aggregate level.
1 - As a percentage, what, in your opinion, is the actual rate of inflation in France?
2 - As a percentage, what, in your opinion, will the rate of inflation be in one year in France?
3 - As a percentage, what, in your opinion, will the rate of inflation be in three to five years in France?
4 - As a percentage, how, in your opinion, will the base wage (before tax, excluding bonuses) change in your firm over the coming 12 months?
Note that the base wage corresponds to gross salary before the deduction of social security contributions and payment of social security benefits. Bonuses and overtime are not included.
The data are trimmed at the 99th centile. To calculate the results, the replies are weighted based on the average number of employees and the relative importance of each firm within its sector, then by the respective weights of the professional branches in terms of value added at the aggregate level.
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Mise à jour le 3 Octobre 2022