The final data published by Eurostat showed that consumer price growth slowed in May, falling below the European Central Bank's 2.0% target for the first time since September 2024, mainly due to a sharp drop in services inflation. Meanwhile, core inflation fell to its lowest level since October of 2021, strengthening calls by dovish ECB policymakers to loosen monetary policy and attend to growth concerns.
According to the report, the consumer price index rose by 1.9% per year after increasing by 2.2% in April. Economists and a preliminary estimate also suggested growth of 1.9%. The European Union annual inflation was 2.2% in May, down from 2.4% in April. A year earlier, the rate was 2.7%.
Meanwhile, on a monthly basis, the consumer price index remained unchanged, as expected, after rising 0.6% in April (the highest level since April 2024). The last time a lower value was recorded was in January (-0.3%).
Eurostat reported that the core consumer price index - excluding energy, food, alcohol and tobacco - rose by 2.3% per year, as expected, after increasing by 2.7% per year in April.
The data also showed that the highest contribution to the annual inflation rate came from services (+1.47%), followed by food, alcohol & tobacco (+0.62%), non-energy industrial goods (+0.16%) and energy (-0.34%).
The lowest annual rates were registered in Cyprus (0.4%), France (0.6%) and Ireland (1.4%). The highest annual rates were recorded in Romania (5.4%), Estonia (4.6%) and Hungary (4.5%). Compared with April 2025, annual inflation fell in fourteen Member States, remained stable in one and rose in twelve.