Annual inflation in Germany fell to 6.1 percent in May

The German Federal Statistical Office (Destatis) has announced the main data for May on price increases.

Consequently, annual inflation in Germany, which was 7.2 percent in April, fell to 6.1 percent in May, below expectations.

The country’s Consumer Price Index (CPI) decreased 0.1 percent in May from the previous month.

The annual inflation expectation was to decrease to 6.5 percent in May.

FOOD PRICES RISE 15 PERCENT A YEAR

In the same period, while energy prices increased by 2.6 percent annually, it is worth noting that the annual increase in food prices continued to increase by 14.9 percent, again above average.

The increase in services was 4.5 percent.

“In May 2023, food prices continued to increase by 14.9 percent compared to the same month of the previous year, above average,” the Destatis statement said.

The EU-compliant CPI also declined 0.2 percent on a month in May and rose 6.3 percent on a yearly basis.

On the other hand, the inflation outlook will determine how far the European Central Bank (ECB) will go in raising interest rates and how quickly it will proceed.

INFLATION IN THE EURO REGION WILL BE ANNOUNCED TOMORROW

The European Statistical Office (Eurostat) will announce the euro zone inflation rate for May tomorrow.

Since July 2022, the ECB has increased the main interest rates 7 times in a row to a total of 375 basis points.

Analysts expect a 25 basis point hike at the ECB’s rate meeting on June 15.

Leading German economic research institutes predict that inflation, which was 6.9% in 2022 on average, will decline to an average of 6% in 2023 and 2.4% in 2024.

The German Central Bank (Bundesbank) expects inflation in the country to remain at 7.2 percent in 2023 before falling to 4.1 percent in 2024. (BRITISH AUTOMOBILE CLUB)