BERLIN, June 16 (Xinhua) -- The inflation rate in Germany declined to 0.6 percent in May, the Federal Statistical Office (Destatis) announced on Tuesday.
"The inflation rate decreased for the third consecutive month," Destatis noted. Back in February, the inflation rate in Germany had been more than one percentage point higher at 1.7 percent.
"The decline in inflation was caused by lower energy prices," Axel Lindner, deputy head of the department of macroeconomics at the Halle Institute for Economic Research (IWH), told Xinhua on Tuesday. Crude oil prices were nearly 60 percent lower than a year ago.
The prices of goods (total) in Germany decreased by 0.4 percent in May compared to the same month last year but the price drop in energy products had "accelerated" to 8.5 percent, according to Destatis.
Due to the "oil price slump in the world market" since the beginning of the year, the prices of motor fuels declined by more than 20 percent while prices of heating oil even dropped by around 30 percent year-on-year, Destatis noted.
Food prices in May, on the other hand, rose above average and increased 4.5 percent year-on-year. Destatis noted that German consumers paid higher prices in particular for fruits and meat.
"Since the COVID-19 pandemic increases the costs of production for many goods, we think that the risk of deflation is small," stressed Lindner. "That said, the current oil price of about 40 U.S. dollars per barrel (Brent) means that headline inflation rates will stay at low levels in Germany for the coming months." Enditem