Inflation in the Eurozone has plummeted to its lowest point in over a year, aided by a decrease in energy prices. The primary rate for May dropped to 6.1%, a significant decrease from 7% in the prior month.
Core inflation in the Eurozone also unexpectedly dropped, but it’s unlikely to halt the European Central Bank’s (ECB) plans for further interest rate hikes.
Consumer prices, excluding certain items such as food and fuel, increased by 5.3% compared to May of the previous year, a decrease from the 5.6% increase in April. This was contrary to the economists’ forecast of a 5.5% rise.
One month could be a fluke.
Two months could be a coincidence.
Three months is a trend.
Euro zone core inflation has turned the corner and is clearly moderating. pic.twitter.com/mLQ9mcT70Z
— Kamil Kovar (@CrisisStudent) June 1, 2023
The figures revealed a considerable slowdown in the top four economies of the 20-nation euro area. This will be favourably received by both policymakers and politicians, especially as the continent grapples with a cost-of-living crisis.
Luis de Guindos, the Vice President of the ECB, mentioned that even though inflation, which spiked at 10.6%, has subsided, victory is yet to be fully declared. He stated, “I believe we are on the right path. We must pay close attention to the development of core inflation.”
