The inflation rate in Germany fell from 7.2 percent to 6.1 percent in May. This was announced by the Federal Statistical Office in a first estimate.
On average, analysts had expected a sharper decline to 5.6 percent.
The decline is mainly due to a significant relaxation in energy prices from a high level. Food continues to be the biggest price driver.
Inflation in Germany continues to slowly cool down at a high level. The inflation rate fell to 6.1 percent from 7.2 percent in May, it said Federal Statistical Office in a first estimate. Inflation peaked at 8.8 percent in October 2022 European Central Bank (ECB) aims for an inflation rate of two percent as a goal for price stability.
The decline in the inflation rate remained somewhat below the expectations of economists and analysts. On average, they had expected the inflation rate to fall to 5.6 percent in May.
Compared to April, consumer prices fell by 0.1 percent in May.
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Energy prices provide some relief. They only increased by 2.6 percent year-on-year. A base effect plays a role here. The jump in energy prices immediately after the start of the Ukraine war is now missing from the statistics in a year-on-year comparison. Food is now the biggest price driver. They were 14.9 percent more expensive in May than in April.
In addition, inflation is spreading and gnawing throughout the economy. This shows the core rate of inflation for all other goods and services. It is now about as high as the general inflation rate.
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Import prices are relaxing. Here, too, the lower prices for energy on the world markets are reflected. In April, import prices were 7.0 percent lower than a year ago, the Federal Statistical Office said. This is the second price decline in a row compared to the same month last year.
Inflation rate according to euro calculation 6.3 percent
In the slightly different calculation at European level, the inflation rate in Germany was 6.3 percent in May, after 7.6 percent in April. The Harmonized Index of Consumer Prices (HICP) makes inflation comparable across Europe.
This value is also decisive for the interest rate decisions of the European Central Bank (ECB). The ECB will decide again in mid-June policy rates.
The federal government expects an average inflation rate of 6.0 percent in Europe’s largest economy for the current year. This is historically still a very high rate of inflation. Last year, the inflation rate reached an average of 6.9 percent, one of the highest values since the founding of the Federal Republic.
Import prices graphics
