May 31, 2024

The annual inflation rate for the euro area is predicted to increase from 2.4% in April 2024 to 2.6% in May 2024.

When examining the primary drivers of inflation in the euro area, services are predicted to have the highest annual rate in May (4.1 %, up from 3.7% in April). Food, drink, and tobacco (2.6 %, up from 2.8% in April), non-energy industrial goods (0.8 %, up from 0.9% in April), and energy (0.3 %, up from -0.6 % in April) are the next highest annual rates.

Primary contributors of inflation

The headline inflation rate in the euro area is influenced to varying degrees by each of the major components. Services make up the largest component in terms of weights for 2024, 100% of the headline HICP, making up roughly 44.9% of household final monetary consumption expenditure in the euro area. Non-Energy Industrial goods come in second, at about 25.7%.

Food, alcohol and tobacco, and energy make up 19.5%, 9.9%, respectively. Even though they make up less than one-third of all spending in the euro area, their prices tend to fluctuate much more than those of the other components, which can have a major impact on headline inflation.

(Source: Eurostat)

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