Inflation Expectations 2023Q3

Business leaders' one-year inflation expectations were stable and 3-5 year expectations fell to 2.5%


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 5 September.
In the third quarter of 2023, the median of business leaders' perception of inflation reached 5%, slightly above the rise in the consumer price index (
CPI), which stood at 4.9% in August, and below that of the harmonised index of consumer prices (HICP), which stood at 5.7% in August. The median of one-year expectations was 4%, and the median of medium term expectations (3 to 5 years) was 2.5%.
Table 1: Business perceptions and expectations of the annual inflation rate (median, %)

Q4 2022 Q1 2023 Q2 2023 Q3 2023
Current Perceived Inflation 6.5 6.0 6.0 5.0
1-year forward inflation expectation 6.0 5.0 4.0 4.0
3-5 year forward inflation expectations 3.0 3.0 3.0 2.5

In the third quarter of 2023, the median of perceived inflation dropped by one percentage point (pp) on the previous quarter, while that of one-year inflation expectations was unchanged. The median of medium-term inflation expectations (3-5 years) fell to 2.5%, returning to its level of the first quarter of 2022. In particular, the share of respondents expecting 2% inflation rose to almost 30%, and is now the most frequently given response in the distribution.
Chart 1: Change in annual inflation rate perceptions and expectations (median, %)
Chart 2: Distribution of three to five-year inflation expectations (%)
% of responses
3-5 year forward inflation expectations (%)
Base wage growth expected by business leaders
Business leaders expect base wages in their companies to grow by 3% over the next year (median), after four quarters of stability at 4%. The share of respondents expecting wage increases of 2% to 3% accounted for 42% of the distribution and rose by seven percentage points over one quarter.
Chart 3: Change in one-year basic wage expectation (median, %)
Chart 4: Distribution of one-year expectations of base wage increases (%)

% of responses
expected wages increase (%)
This survey was carried out between 29 August to 5 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.
More information on: time series, calendar, methodology

All the series published by the Banque de France are available at the following address Webstat Banque de France

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STAT INFO - Q3 2023
Inflation expectations
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Inflation Expectations
  • Published on 09/18/2023
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Published on Monday, September 18, 2023