German Inflation Eases As Estimated

(RTTNews) - Germany's inflation slowed as initially estimated in May largely reflecting the slowdown in energy price growth, final data from Destatis revealed Friday.

Destatis confirmed that consumer price inflation weakened to 2.6 percent in May. Inflation eased from 2.9 percent in April, which was the highest since December 2023.

Likewise, EU harmonized inflation slowed to 2.7 percent, as estimated, from 2.9 percent a month ago.

Destatis President Ruth Brand observed that inflation in May was somewhat lower than in the previous months. "Energy prices remained at a high level as a result of the Iran war, although the reduction in the tax on motor fuels, which has applied since the start of May, is likely to have had a dampening effect on the rise in prices," Brand added.

Services inflation climbed to 3.1 percent and remained above overall inflation. Goods prices grew at a slower pace of 2.2 percent. Energy prices logged an annual growth of 6.6 percent, primarily due the price developments on the crude oil market in the wake of the conflict in Iran and the Middle East. However, the annual increase slowed from 10.1 percent in April due to the temporary reduction in the energy tax on petrol and diesel.

At the same time, food price inflation eased to 0.4 percent in May. Core inflation rose to 2.5 percent but stayed slightly below overall inflation. On a monthly basis, consumer prices dropped 0.2 percent in May after rising 0.6 percent in April.

The harmonized index of consumer prices also posted a monthly drop in May, down 0.1 percent, reversing the last month's 0.6 percent rise. Both monthly CPI and HICP rates matched initial estimates.