German inflation slows as energy prices cool
By Abigail Townsend
Date: Tuesday 13 Jun 2023
(Sharecast News) - German inflation continued to slow in May, official data showed on Tuesday, in line with expectations.
According to Destatis, the Federal Statistics Office, the consumer price index was 6.1% year-on-year in May, compared to April's rise of 7.2%.
The harmonised index of consumer prices rose 6.3% year-on-year, against the 7.6% rise seen in April. All European Union countries use the same methodology to calculate HICP.
Both the CPI and HICP measures of inflation were in line with earlier estimates from Destatis, and consensus.
Ruth Brand, Destatis president, said: "The rate of inflation has continued to slow, but remains at a high level nevertheless.
"The year-on-year increase in energy prices was much smaller in May, and food prices continued to be the biggest driver of inflation."
Energy prices rose 2.6% year-on-year in May, compared to April's 6.8% jump. Food price inflation also eased, falling to 14.9% from 17.2% in April, but remains at historically high levels.
Once the more volatile elements of energy and food were stripped out, core inflation eased 0.4 percentage points to 5.4%, while HICP declined to 5.1% from 5.6% in April.
Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: "Headline inflation in the Eurozone's largest economy is now falling rapidly.
"Looking further ahead, we see a big decline in inflation in September, and then a straight-line decline towards 2% by the middle of next year. Core goods inflation is now falling steadily, but this too likely won't drive the data much until September, when base effects in services drop out."
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