Inflation increases in May

Latest reading: Inflation rose to 2.4% in May from April’s 1.8%, overshooting the midpoint of the Central Bank’s 1.0–3.0% target. The uptick was largely driven by rising prices for housing and utilities. In addition, price pressures for food and non-alcoholic beverages rose at a stronger rate, and transportation prices declined at a steeper pace. Meanwhile, the trend remained unchanged, with annual average inflation coming in at April's 2.5% in May. Lastly, consumer prices rose 0.52% over the previous month in May, swinging from April's 0.13% fall. May's result was the highest reading since January.

Panelist insight: Commenting on the outlook, ING’s David Havrlant and Frantisek Taborsky stated: “We foresee faster price growth in almost all components of the consumer basket, whether it be fuel and food prices on the one hand, or services prices and imputed rents on the other, implying more potent core inflation. The labour market remains tight, wage growth lofty, and real retail sales are flying high.”

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