Eurozone annual inflation slows to 6.1% in May
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Annual inflation in 20 eurozone countries in May slowed to 6.1% after 7% in April and 6.9% in March, follows from the preliminary estimates Eurostat.
Among the countries for which the agency provides preliminary data, the highest inflation was recorded in Latvia and Slovakia (12.3%), Estonia (11.2%) and Lithuania (10.7%). The lowest price growth was shown by Belgium (2.7%), Spain (2.9%) and Cyprus (3.6%).
Core inflation (an indicator that does not take into account energy and food prices – Vedomosti) fell to 5.3% after 5.6% in April.
Economists polled by Reuters expected inflation to slow to 6.3% and core inflation to 5.5%. ECB Vice President Luis de Guindos said today, transmits agency that the base rate hike cycle is not yet complete, although the regulator has already carried out most of the tightening of monetary policy.
4 May ECB raised base rate at 25 bp. up to 3.75%. At 25 b. also increased rates on deposits and on margin loans of the ECB, up to 4% and up to 3.25% respectively. This is the seventh consecutive increase in the base rate and the highest level since 2008.
In mid-May at the European Commission reported about a significant increase in risks for the EU economy. The first and key risk is an increase in core inflation, the second is the development of a banking crisis, and the third is a new round of price rallies in the energy markets. Despite the fact that energy prices have been declining in recent months, and the occupancy of European gas storage facilities was 61% at the beginning of May, the future dynamics of energy product prices remains unpredictable, analysts say.
EC experts expect core inflation to reach 6.9% in 2023, after which it will slow down to 3.6% in 2024.
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