Further decreasing prices

140611_CPI_ENIn May, just as in April, the Central Statistical Office (CSO) reported 0.1% annual price cut (although the Eurostat-methodology based harmonized inflation was 0%). Prices dropped by 0.2% month-on-month, mainly due to the latest cut in regulated energy prices, namely gas prices by 6.5% in April. In addition, motor fuel prices decreased by 0.6% m-o-m. Monthly core inflation was 0.3%, while annual core inflation accelerated from 2.4% in April to 2.5% in May. In light of today’s inflation print, annual average CPI in 2014 is likely to be less than it had been so far thought.