The eurozone’s economy is in dire straits due to stubborn inflation. It means that the monetary authorities need to take measures.
According to the Eurostat data, the annual inflation rate in the EU rebounded in May. The CPI in the euro area countries rose by 2.6% in May 2024 from a year ago.
In other words, the CPI in May exceeded the rate in April by 0.2%. Service prices in the eurozone logged the fastest growth of 0.4%, standing at 4.1% in May year-over-year. The energy sector also saw a notable increase, with prices rising by 0.3% following a 0.6% decline in April.
However, there is some good news. Inflation pleased consumers in the food, alcohol, and tobacco segments and slowed down to 2.6%. As for the manufacturing sector, inflation rose by 0.7% in May.
Moreover, the core CPI, excluding food and energy prices, accelerated to 2.9% in the eurozone. In April, the annual CPI had grown to 2.7% at the slowest pace since February 2022. As a result, the monthly increase was 0.2%.
Investor sentiment is challenged by the concerns about the tepid performance of Germany known as the powerhouse of the EU economy. Germany discouraged investors because it ranked 24th among the eurozone countries in the updated ranking of the IMD International Business School. Analysts had to revise their assessments on the back of persistent inflation in Germany.
