2011.05.2710:07:00UTC+00German Inflation Eases Unexpectedly In May

German inflation slowed unexpectedly in May, data from the Federal Statistical Office revealed Friday.

EU harmonized annual inflation slowed to 2.4 percent on a yearly basis from 2.7 percent in April. Economists had expected it to remain at 2.7 percent in May. On a monthly comparison, the Harmonized Index of Consumer Prices fell 0.2 percent, compared to the consensus forecast of 0.1 percent rise.

Still, inflation continues to stay above the European Central Bank's threshold 2 percent. The statistical office is slated to release final figures for May on June 10.

According to Ben May, an economist at Capital Economics, the unexpected fall in German consumer prices, which was probably driven by a drop in the core rate, is a welcome sign that inflationary pressures in the region may not be as great as the central bank think.

ING Bank NV's economist, Carsten Brzeski said today's inflation numbers are just a temporary breather on the inflation front.

The consumer price index advanced 2.3 percent in May from the same period of previous year, in line with economists' expectations. The annual rate slowed slightly from April's 2.4 percent. Month-on-month, consumer prices remained flat in May.