Euro zone May inflation confirmed at 6.1% yr/yr, core eases

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BRUSSELS, June 16 (Reuters) – Euro zone consumer inflation sharply decelerated in May, the European Union’s statistics office confirmed on Friday, with the core price growth measure, watched closely by the central bank, also slowing.

Eurostat confirmed its earlier estimates that consumer in the 20 countries did not change at all month-on-month in May resulting in a 6.1% rise year-on-year, down from 7.0% year-on-year in April.

The contribution from energy prices, long the main driving force of inflation, was negative in May at 0.09 points and the main driver became the cost of food, alcohol and tobacco which added 2.54 points to the final figure.

The second biggest contributor was the rising prices of services, adding 2.15 points, with industrial goods adding another 1.51 points.

The European Central Bank wants to keep inflation at 2 percent over the medium term and has been raising interest rates quickly since the middle of last year to curb inflation.

The ECB raised interest rates again on Thursday to a 22-year high of 3.50% and said it would move again in July, continuing what has been the fastest pace of monetary tightening in the bank’s quarter century existence.

Euro area inflation rates in % for main components, measured by HICPs

Weight (‰)Annual rateMonthly rate
2023May 22Dec 22Jan 23Feb 23Mar 23Apr 23May 23May 23
All-items HICP1000.
> excluding energy897.
> excluding energy, unprocessed food852.
> excluding energy, food, alcohol & tobacco697.
> excluding energy, seasonal food872.
> excluding tobacco978.
Food, alcohol & tobacco199.87.513.814.115.015.513.512.50.4
> excluding processed food, alcohol & tobacco154.87.014.315.015.415.714.613.40.5
> excluding unprocessed food45.
Non-energy industrial goods262.
The table includes the core rate of inflation referred to by the European Central Bank, which excludes volatile energy and unprocessed food costs.

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