Eurozone inflation down to 1.9 pct in May: Eurostat

An ING economist has attributed the current disinflation to the recent trade war.

BRUSSELS, June 3 (Xinhua) -- The Eurozone's annual inflation rate for May stood at 1.9 percent, down from 2.2 percent in April, bringing inflation back below the European Central Bank's (ECB) target of 2 percent, according to a flash estimate published Tuesday by Eurostat.

Prices for food, alcohol, and tobacco rose by 3.3 percent year-on-year, up from 3 percent in April. The annual inflation rate for services reached 3.2 percent in May, down from 4 percent the previous month.

Inflation for non-energy industrial goods remained steady at 0.6 percent from April to May. Energy prices registered a negative annual inflation rate of -3.6 percent in May, unchanged from the previous month.

Among individual countries, Germany's year-on-year inflation rate in May stood at 2.1 percent, compared with 2.2 percent in April. Both Spain and Italy reported inflation rates of 1.9 percent, while France recorded the lowest rate at 0.6 percent, down from 0.9 percent in April.

"Overall, inflation has been hovering around the target for a while now, and ECB forecasts have placed medium-term inflation close to target for some time," said Bert Colijn, chief economist at ING.

According to Colijn, the current disinflation in the Eurozone is driven by the recent trade war, which has led to lower commodity prices, a stronger euro against the dollar, and subdued economic activity. So far, the European Union (EU) has not imposed retaliatory tariffs on the United States.