(Alliance News) – Annual inflation in the euro area cooled to 1.9% in May, dipping below the European Central Bank's 2% target for the first time in over three years, final figures from Eurostat showed on Wednesday.

The May rate of consumer price inflation slowed from 2.2% in April and marked a significant cooling from 2.6% a year earlier. The final reading confirmed a flash estimate released at the beginning of this month.

Across the wider European Union, annual inflation also eased, falling to 2.2% in May from 2.4% in April and 2.7% in May 2024.

The decline was mainly driven by a slowdown in services inflation and continued negative contribution from energy prices. Services made the largest positive contribution to euro area inflation at 1.47 percentage points, followed by food, alcohol and tobacco at 0.62 point. Energy dragged inflation down by 0.34 point.

Among member states, the lowest annual rates were recorded in Cyprus at 0.4%, France at 0.6%, and Ireland at 1.4%. The highest were in Romania at 5.4%, Estonia at 4.6%, and Hungary at 4.5%.

Month-on-month, prices in both the euro area and the wider EU were unchanged in May.

By Eva Castanedo, Alliance News reporter

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