German inflation reaches 3.0 percent in May

German inflation reached 3.0 percent in May as the cost of energy stoked consumer price increases in the biggest European economy, figures released Friday by the Federal Statistics Office showed.

On a monthly basis, German consumer prices gained 0.6 percent, the stats office said. Energy prices pulled overall inflation higher, and when they were stripped out, the annualised rate dropped back to 1.9 percent, though “energy costs in the total expenditure of households was less than 10 percent,” the report noted.

May marked the second time this year that German inflation has reached the 3.0 percent threshold, following an increase of 3.1 percent in March. A breakdown of the numbers showed that fuel prices climbed by an average of 12.3 percent from May 2007, with diesel fuel posting an increase of 26.4 percent, nearly erasing a previously significant difference with petrol.

Among other sources of energy, the cost of electricity gained 7.4 percent and the price of gas was 4.7 percent higher on the year. Food products were up by 7.5 percent, with milk, cheese and eggs gaining 18.9 percent.

Some decreases were also seen, in particular for information processing equipment such as computers, the price of which fell by an average of 15.7 percent. The cost of film and still cameras decreased by 11.7 percent, while communications prices were 3.6 percent lower and telecommunications equipment cost 16.3 percent less on average.

When calculated according to a harmonised consumer price index (HICP) that allows for comparison across the 15-nation eurozone, German inflation came in at 3.1 percent on an annual basis and 0.7 percent on the month.

The president of the European Central Bank, Jean-Claude Trichet, said last week that the ECB might raise its main lending rate by a small amount in July to quash expectations that eurozone inflation could spiral out of control.

The bank has raised its forecast for inflation this year to 3.4 percent, and its estimate for 2009 to 2.4 percent.