Jun 14, 2022 02:43AM ET
By: AnalysisWatch
May' German consumer prices rose on a monthly basis to 0.9% from 0.8%, according to the Federal Statistical Office's final CPI reading on Tuesday, as inflationary pressure intensifies in Europe's largest economy.
The annual figure also rose to 7.9% in May from 7.4% the previous month, suggesting the European Central Bank will face a challenge in trying to control soaring inflation.
The data comes after the German central bank warned last week that inflation would rise by 7.1% in 2022, well above its previous estimate of 3.6% in December. The Bundesbank added that the rise in prices is set to continue next year, with the inflation forecast for 2023 rising from 2.2 per cent to 4.5 per cent.
Inflation this year will be even stronger than in the early 1980s, said President Joachim Nagel.
Price pressures have even intensified recently, which is not fully reflected in the current projections.
The Bundesbank also cut its growth projections for this year, partly due to the impact of the war in Ukraine. German GDP is now estimated at 1.9% this year, more than halving the previous forecast of 4.2%.