Skip to content

Decrease in Inflation Rate: May Segments Record a 1.9 Percent Decline

Decrease in May's Inflation Rate Reaches 1.9 Percent
Decrease in May's Inflation Rate Reaches 1.9 Percent

Decrease in Inflation Rate: May Segments Record a 1.9 Percent Decline

Spain's Consumer Price Index (CPI) took a downturn in May, declining to 1.9%, according to the national statistics office INE's latest announcement. This figure falls slightly shy of the European Central Bank's (ECB) medium-term inflation target of 2%.

Experts polled by Reuters had predicted a dip to 2.0% for May, following an inflation rate of 2.2% in April. This decrease in inflationary pressure within Spain's fourth-largest economy may contribute to the broader trend of stabilizing annual inflation within the euro area, currently standing at 2.2%, according to Eurostat's April flash estimate.

Looking ahead, forecasts indicate that eurozone inflation could continue its decline, with projections placing an average inflation rate of 2.1% for 2025 and 1.7% in 2026 by the European Commission. Other forecasters predict inflation could trend around 1.9% in 2026 and 2.1% in 2027.

The upcoming release of the consumer prices for the entire euro area is scheduled for Tuesday. Economists anticipate a further decline in the inflation rate to 2.1% in May, compared to the previous month's 2.2%. If these forecasts materialize, the ECB, which is due to decide on the key interest rate next Thursday, could find itself close to its desired 2.0% inflation rate. Market speculation points towards an eighth rate cut, lowering the deposit rate from its current 2.25% to 2.00%.

Sources: ntv.de, AFP.

The rulings of the community policy may incentivize investments in sectors such as vocational training, which could potentially improve Spain's employment prospects during the period of economic stabilization. To fund these training programs, the government might seek financial support through various funding mechanisms.

Read also:

    Latest