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Consumer prices in Germany in May rose stronger than forecast


Mai, 29 2024
watermark Economic news

According to preliminary data from the German Federal Statistical Office (Destatis), consumer prices harmonized with EU standards increased by 2.8% year-on-year in May 2024, after an increase of 2.4% in the previous month. 


Economists had predicted an indicator of 2.7%. They noted that such an increase in inflation is a fairly predictable phenomenon and should not cause concern to ECB policymakers before making a decision on the interest rate next week. 


Core inflation, excluding more volatile elements, remains high. In May, the indicator was 3.0%, unchanged from the previous month.


Many economists argue that two consecutive months of rising inflation is not a reason to panic. They note that the May figures were largely predictable, in particular, due to the one-time effect caused by the termination of the cheap national rail ticket system introduced a year earlier.


Germany's economic prospects have improved slightly after the temporary suspension of energy imports from Russia due to the start of its operations on the territory of Ukraine. Earlier this year, the country avoided recession by registering 0.2% growth in the first quarter, but the pace of recovery remains insufficient. The German government forecasts economic growth of 0.3% this year and 1.0% in 2025, with an expected inflation rate of 2.4% in 2024.


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