Euro Area: Inflation slumps to nearly four-year low in May as energy prices continue to fall

Euro Area Inflation May 2020

Euro Area: Inflation slumps to nearly four-year low in May as energy prices continue to fall

Harmonized inflation fell to 0.1% in May from April’s 0.3%, marking the lowest reading since June 2016, according to a flash estimate released by Eurostat on 29 May. Inflation thus moved further below the European Central Bank’s target rate of near, but under, 2.0%. May’s further drop was again mainly due to a much sharper fall in energy prices, and to a lesser extent to slower price increases for food, alcohol and tobacco and non-energy industrial goods. On the other hand, prices for services rose at somewhat faster clip than in April.

On a monthly basis, harmonized prices dipped 0.1% in May, contrasting April’s 0.3% increase. Core inflation, which excludes volatile energy and unprocessed foods prices, was stable at April’s 1.1%.

A complete set of data for harmonized inflation will be released on 17 June.

Commenting on the release, Bert Colijn, Eurozone senior economist at ING, stated:

“The severe economic fallout is having a deflationary effect, which means the ECB is likely to stay in a crisis-fighting mode for some time to come.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest