By Maria Martinez
BERLIN, May 29 (Reuters) – Inflation fell in four key German states in May, preliminary data showed on Friday, suggesting Germany’s national inflation rate could ease this month despite higher energy prices due to the Iran war.
In Bavaria, the inflation rate fell to 2.6% in May from 2.9% in April. In North Rhine-Westphalia, it decreased to 2.4% from 2.7%, in Baden-Wuerttemberg to 2.4% from 2.6% and in Lower Saxony it fell to 2.7% from 3.0%.
The war in Iran had pushed up energy and raw material prices in previous months and the German government now expects inflation to accelerate to 2.7% this year and 2.8% in 2027.
Economists polled by Reuters are forecasting a harmonised national inflation rate in Germany – the euro zone’s largest economy – of 2.8% in May, down from 2.9% in the previous month.
National figures will be released later on Friday.
The German data comes ahead of the euro zone inflation release on Tuesday. Inflation in the bloc is expected to come in at 3.3% in May, up from 3.0% in the previous month, according to economists polled by Reuters.
The European Central Bank kept interest rates on hold at its meeting in April, but a further increase in inflation is making it very likely that the bank will follow up its earlier warnings with actual policy action next month.
(Reporting by Maria MartinezEditing by Madeline Chambers)
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