Harmonized inflation drops to lowest level since September 2024 in May

Latest reading: Harmonized inflation fell to 1.9% in May, slightly below April’s 2.2% and the ECB’s 2.0% target. May's result represented the lowest inflation rate since September 2024. Looking at the details of the release, prices for services rose at the slowest pace in three years. That said, prices for food, alcohol and tobacco rose at a sharper rate in May. In addition, the trend pointed down mildly, with annual average harmonized inflation coming in at 2.2% in May (April: 2.3%). Meanwhile, core inflation fell to 2.3% in May from the previous month's 2.7%. Finally, harmonized consumer prices dropped 0.03% in May over the previous month, contrasting the 0.57% increase recorded in April. May's result marked the sharpest fall in prices since January.

Outlook: Our Consensus is for inflation to remain around current levels, broadly matching the ECB’s 2.0% target amid downbeat oil prices and soft economic activity.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects European inflation projections for the next ten years from a panel of 69 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable inflation forecast available for European inflation.

Download one of our sample reports to visualize what a Consensus Forecast is and see our European inflation projections.

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