German inflation steady at 2.1 pct in May

The Star

2 days ago

BERLIN, June 13 (Xinhua) -- Germany's inflation rate remained unchanged at 2.1 percent in May, the same as in April, the Federal Statistical Office (Destatis) reported on Friday.
Food prices continued to outpace the headline inflation rate, rising 2.8 percent year-on-year. In contrast, energy product prices dropped by 4.6 percent compared to May 2024.
Excluding energy, the inflation rate climbed to 2.7 percent, while core inflation -- which excludes both food and energy -- stood slightly higher at 2.8 percent. Both indicators have consistently remained above the overall inflation rate for more than a year, reflecting persistent price pressures in other key sectors, particularly services.
"The inflation rate has stabilized, mainly due to the continued decrease in energy prices," said Ruth Brand, president of Destatis. "However, the rise in food and service prices continued to exert upward pressure in May."
Despite the current stability, uncertainty surrounding energy prices is increasing, raising concerns about renewed inflationary risks. According to German business daily Handelsblatt, fears have intensified following Israel's military strike on Iran early Friday, which has already triggered a spike in global oil prices.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, told Handelsblatt that oil prices could surge to 100 U.S. dollars per barrel if geopolitical tensions escalate. "In any case, higher oil prices mean that higher inflationary pressures will return," he said.