German inflation eases in May

(Sharecast News) - German inflation eased in May despite the ongoing conflict in the Middle East, according to figures released on Friday by Destatis.

The consumer price index fell to 2.6% on the same month a year earlier, from 2.9% in April. Meanwhile, the harmonised index of consumer prices was 2.7%, down from 2.9% in April and versus expectations of 2.8%.

Core inflation - which excludes food and energy prices - was 2.5% in May, up from 2.3% in April.

The data showed that energy prices rose 6.6% in May, down from a 10.1% increase the month before.

Carsten Brzeski, global head of macro at ING, said: "Looking at the available components, it was not only energy prices that actually dropped compared to April, but also food prices and prices for transportation, clothing and household goods. The drop in energy prices was obviously the most notable move but can be explained by the government's so-called tax rebate, lowering fuel and diesel taxes by some 17 cents per litre in May and June.

"This also means that today's inflation numbers should not be read as a sign that the inflation wave is already over before it actually started but rather as a confirmation that this is a relatively mild inflation wave."