According to the Federal Statistics Office, Germany observed a rebound in its inflation rate for May, largely driven by increased costs in the services sector. The revised figures confirm that consumer prices, aligned with other European Union nations, climbed 2.8% year-over-year in May, up from 2.4% in April.
Service prices surged by 3.9% in May compared to the same month the previous year, showing a significant jump from the 3.4% increase recorded in April. This sharp rise can be partially attributed to the fading impact of a base effect which commenced when a national cheap rail travel scheme was rolled out in May 2023.
On the flip side, energy and food prices have contributed to tempering the overall inflation since the start of the year. Energy prices fell by 1.1% compared to May 2023, while food prices saw a slight rise of just 0.6%, significantly below the broader inflation rate.
Meanwhile, core inflation—which excludes volatile sectors such as food and energy—remained steady at 3.0% in May, unchanged from April. This metric holds particular importance for the European Central Bank (ECB), which tracks it closely. The ECB recently enacted its first interest rate cut since 2019, highlighting strides made in curbing inflation but also conceding that the challenge is far from conquered.