German final HICP inflation for May likely to meet flash estimate of 0 pct

Germany’s final HICP inflation for May is likely to have confirmed the flash estimate of zero percent y/y, said Societe Generale in a research report. All major components, excluding food, positively contributed to May’s inflation. Improvement in services inflation mainly led the overall rebound. Services inflation had reversed in April after posting gains in March that was due to early Easter.

Within the headline figure, the energy component indicated a slower annual fall, whereas food prices were subdued for the second consecutive month. Germany’s Federal Statistics Office (Destatis) press release suggests that the core CPI inflation appears to have accelerated to 1.2 percent y/y.

Within core components, inflation on prices paid for services were up to 1.2 percent y/y from 0.8 percent y/y. Rent inflation marginally rose to 1.1 percent y/y. Meanwhile, non-energy industrial goods’ prices also appear to have slightly risen. Inflation in Germany is expected to continue rebounding with the help of base effects from the energy component, according to Societe Generale.