Inflation rises in May from April

Latest reading: Consumer prices rose 3.1% in annual terms in May, following a 2.6% rise in the previous month. May's reading was the strongest since December 2023. Relative to the previous month's figures, there were higher price pressures for housing and utilities (+1.8% on a year-on-year basis vs +1.7% in April), transportation (+11.6% vs +9.7% in April), food and non-alcoholic beverages (+1.6% vs +0.3% in April), recreation and culture (+5.0% vs +3.4% in April) and clothing and footwear (+2.8% vs +2.1% in April). Meanwhile, core consumer prices rose 2.5% on a year-on-year basis in May, following a 2.2% rise in the previous month. Finally, consumer prices were up 0.46% in May on a month-on-month basis, following a 0.48% rise in the previous month.

Panelist insight: Commenting on the outlook, Nomura’s analysts stated: “We believe underlying inflation dynamics [are] still well controlled, evidenced by the inflation diffusion index remaining stable in May. Thus, we continue to expect inflation to peak in August-September before resuming a disinflationary path.”

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