Consumer prices increased 0.24% over the previous month in May, which was below the 0.76% increase seen in April. May’s result marked the weakest reading since February. Looking at the details of the release, transportation prices fell at a quicker pace in May compared to the previous month, while price pressures for housing picked up pace. Moreover, prices for education and entertainment dropped.
Inflation held steady at April’s 3.4% in May. May’s result was the joint-highest inflation rate since August 2012, and was driven by higher food and fuel prices. That said, inflation is still muted relative to other developed economies, amid relatively mild wage growth. Meanwhile, the trend pointed up slightly, with annual average inflation coming in at 2.7% in May (April: 2.6%).
FocusEconomics Consensus Forecast panelists see inflation averaging 2.7% in 2022, which is up 0.3 percentage points from last month’s forecast. For 2023, the panel projects inflation to average 1.5%.