EU Economy
Eurozone annual inflation falls to 0.5% in May
By Finfacts Team
Jun 3, 2014 - 10:12 AM

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Eurozone annual inflation is expected to be 0.5% in May 2014, down from 0.7% in April, according to a flash estimate from Eurostat, the statistics office of the European Union.

Looking at the main components of Eurozone inflation, services is expected to have the highest annual rate in May (1.1%, compared with 1.6% in April), followed by food, alcohol & tobacco (0.1%, compared with 0.7% in April), non-energy industrial goods (0.0%, compared with 0.1% in April) and energy (0.0%, compared with -1.2% in April).

Germany's annual inflation rate almost halved in May, raising concerns that the Eurozone is facing a prolonged stretch of excessively low consumer-price growth that could derail its fragile recovery.

Using the EU's harmonised rate, Germany's inflation rate fell to 0.6% in May from 1.1% in April.

The official ECB inflation target is "below but close to 2%" and this week the European Central Bank is expected to announce new measures to seek to head off deflation fears by triggering higher inflation and a lower euro rate against the US dollar.

The Eurozone consists of Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.

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