Germany's Inflation Rate Drops Sharply in May, As Expected

By Nina Adam Features Dow Jones Newswires

Inflation in Germany eased sharply in May, a development that is likely to bolster expectations that the European Central Bank won't rush to unwind its stimulus program.

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Germany's annual inflation rate, measured by harmonized European Union standards, fell to 1.4% from 2.0% in April, the Destatis statistics office said Wednesday, confirming a preliminary estimate from May 30.

A decline had been widely expected, after the late-timing of Easter in 2017 compared with 2016--and related price rises in the services sector--pushed up inflation in April.

As a consequence, inflation in Europe's largest economy is well under the ECB's target for the eurozone of "below, but close to" 2%.

Energy prices in Germany increased 2.0% from May last year, while food prices rose 2.4%.

Excluding energy prices, which can be volatile, consumer prices in Europe's largest economy were unchanged on the month, but rose 1.4% on the year.

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Write to Nina Adam at nina.adam@wsj.com

(END) Dow Jones Newswires

June 14, 2017 02:25 ET (06:25 GMT)