Germany's inflation rate increased to 2.4 per cent in May 2024, up from 2.2 per cent in April and March, primarily driven by a surge in service prices, according to data released on Wednesday by the Federal Statistical Office (Destatis). Service prices increased notably by 3.9 per cent, with significant rises observed in insurance services, social facility services, and catering services. However, the Destatis data showed that the inflationary impact was moderated by declining energy prices, which fell by 1.1 per cent year-on-year. Household energy costs decreased notably by 3.3 per cent, although district heating costs surged by 27.9 per cent. Food prices exhibited mixed trends, with an overall rise of 0.6 per cent. While some categories, like dairy products and fresh vegetables, saw price decreases, others, such as edible fats and oils, experienced notable increases, Destatis added. Core inflation, excluding volatile food and energy prices, remained stable at 3.0 per cent, indicating persistent inflationary pressures in other sectors. Goods prices increased by 1.0 per cent, with significant price hikes in tobacco products and non-alcoholic beverages and declines in mobile phones and information processing equipment. The Consumer Price Index (CPI) rose modestly by 0.1 per cent from April to May 2024. Significant price increases were observed in the tourism sector for air tickets and package holidays, partly due to early Whitsun holidays, while energy and food prices saw slight declines. Overall, the inflation trends reflect a complex interplay between rising service prices and moderating influences from declining energy and food prices, highlighting the diverse and dynamic factors shaping Germany's inflationary landscape, Destatis President Ruth Brand commented.
