Germany Inflation May 2019


Germany: Harmonized inflation eases in May

June 13, 2019

Harmonized consumer prices rose 0.3% month-in-month in May, down from the 1.0% increase logged in April. May’s moderation came on the back of softer price increases for alcoholic beverages and tobacco; utilities; and transport, while prices for clothing and footwear; communication; recreation and culture; and education fell.

Harmonized inflation, meanwhile, decelerated from 2.1% in April to 1.3% in May; annual average harmonized inflation inched down to 1.9% from 2.0%. Lastly, annual average consumer price inflation was stable at April’s 1.8% in May.

Commenting on inflation developments in Germany, Carsten Brzeski, chief economist at ING Germany, noted that core inflation remains subdued in the country, and in fact, the eurozone with recent data showing “that core inflation […] is still moving sideways and actually has been doing so since 2015. The ECB’s hope that headline inflation would move towards the ECB’s medium-term aim is increasingly being derailed rather than delayed. In fact, if it were not for oil prices, the last years of monetary stimulus have avoided a further drop in underlying inflation but have not succeeded in bringing inflation close to target.” Brzeski continued to state that “as a consequence, even though it’s not our base case, additional easing measures over the summer should not be ruled out.”

FocusEconomics Consensus Forecast panelists expect harmonized inflation to average 1.4% in 2019, which is unchanged from last month’s forecast. For 2020, our panel sees average inflation at 1.6%. This is largely in line with the Bundesbank projections. While the Bundesbank kept its forecast for harmonized inflation in 2019 unchanged at 1.4%, it revised down its inflation expectation for next year to 1.5% from 1.8% in December 2018.

Author:, Economist

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Germany Inflation Chart

Germany Inflation May 2019

Note: Month-on-month and year-on-year changes of harmonized index of consumer prices %.
Source: Federal Statistics Office (Destatis) and FocusEconomics calculations.

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