German inflation nearly disappears in May

by   CIJ iDesk I
2020-07-01   10:49

Consumer prices rose just 0.9 percent this May compared to a year ago in Germany. It's a low figure but economists expect it to fall still further as the impact of the coronavirus crisis makes itself felt across the continent. Germany's annual inflation rate in May was 0.6 percent, its lowest level in nearly four years, but slightly higher than anticipated by pessimistic economists. The main factor in the results were drastically reduced energy prices, as overall they fell 6.2 percent in May alone, or 8.5 percent below their levels from a year ago. This offset a 4.4 percent rise in food prices. The fact that VAT levels have been reduced is helping only in part as retailers aren't passing on their entire savings to consumers. But the overall effect is that if there's any inflation at all in June, it could be for the last time this year. Overall, the ECB is predicting annual inflation of just 0.3 percent for the entire Eurozone.