Germany Inflation May 2020


Germany: Harmonized inflation rises in May

June 15, 2021

Harmonized consumer prices rose 0.28% month-on-month in May, down from 0.46% in April. The print reflected falling prices for food offsetting a notable increase in energy prices as the price for oil continued to rise.

Harmonized inflation rose to 2.4% in May, an over two-and-a-half-year high, from April’s 2.1%. Higher energy prices and the removal of the temporary VAT reduction at the start of the year have seen inflationary forces pick up. In addition, certain goods and services are unavailable, resulting imputed prices, distorting the figure.

Analysts at the EIU added:

“January–March 2021 saw a change in trend, with annual inflation averaging 1.7% as a consequence of the end of the VAT cut, new carbon emissions certificates that have increased transport and heating costs, and a minimum-wage rise. Annual price growth will remain above the euro zone average in 2021 as a consequence of these changes in administered prices, averaging 1.9%, and exceeding 2% in the second half of the year (when the base period will include the 2020 VAT cut).”

FocusEconomics panelist expect harmonized inflation to average 2.0% in 2021 and 1.5% in 2022.


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Germany Inflation Chart

Germany Inflation May 2021 0

Note: Annual and monthly variation of consumer price index in %.
Source: Federal Statistics Office (Destatis) and FocusEconomics calculations.

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