Cheaper oil helped France to an unexpected 0.2 per cent fall in consumer prices in April.
Statistics body INSEE said the provisional April inflation in EU measurement terms was the best monthly performance since November 2001 and took consumer price inflation in France to 1.9 per cent year-on-year, down from an annualised 2.6 per cent in March.
Finance Minister Francis Mer said this morning the drop would help underpin a recovery in the country's sluggish economy.
Inflation had been curbed by declining oil prices and a strong euro, he said, bolstering household purchasing power.
That should impact on consumer consumption, which has been the main driver of French growth that the government expects to reach 1.3 per cent this year.
The news on jobs was bleak, however. The dominant services sector continued to lay off staff in the first quarter of 2003, with overall non-farm payrolls falling 0.3 per cent - the worst showing since the second quarter of 1993, said INSEE.
The jobs and inflation news, coming after the weak German and Italian first-quarter growth data, raised market expectations that the European Central Bank (ECB) could cut interest rates in early June.
Mr Mer said this week inflation posed little danger and hinted he wanted an ECB interest rate cut. In today's Financial Times, he said growth would be the focus when leaders of the world's major economies meet next month in Evian, France.
AFP