Inflation for selected goods and services rises in May in Europe

In May 2021, the euro area (EA) annual inflation rate was 2.0 %, up from 1.6 % in April, while the European Union (EU) annual inflation was 2.3 % in May 2021, up from 2.0 % in April.

Since the beginning of 2020, inflation in the EU and the euro area has developed very differently for the various groups of goods and services, with some groups of goods and services being more affected than others by the COVID-19 pandemic.

Between January 2020 and May 2021, the largest price variations in the EU were reported for the ‘transportation’ and ‘clothing and footwear’ categories. Prices for ‘transportation’ fell sharply in the first months of 2020 and were 4.9 % lower in May 2020 than a year earlier. However, the cost of transportation began increasing again and by May 2021 prices were 7.3 % higher than in May 2020. In the ‘clothing and footwear’ category, annual inflation rate reached a peak of 5.4 % in July 2020 and a low of -2.1 % in December 2020.

These categories experienced similar fluctuations in the euro area during the same period: the annual inflation rate for ‘transportation’ ranged from 6.6 % in May 2021 to -4.5 % in May 2020, for ‘clothing and footwear’, it ranged from 6.3 % in July 2020 to -2.2 % in December 2020, for ‘food and non-alcoholic beverages’, from 3.6 % in April 2020 to 0 % in April 2021, while for ‘housing, water, electricity, gas and other fuels’ it ranged from 3.5 % in May 2021 to -1.3 % in May 2020.

Data collection for inflation statistics has been affected by the COVID-19 pandemic in all countries. Eurostat and the Member States’ National Statistical Institutes have agreed a set of procedures to estimate prices that could not be collected due to mobility restrictions or closures of outlets. Further information on these procedures is available on Eurostat website section on inflation.

Two further categories in the EU experienced significant fluctuations during the same period: ‘food and non-alcoholic beverages’ and ‘housing, water, electricity, gas and other fuels’. Specifically, the annual inflation rate for ‘food and non-alcoholic beverages’ was on a rising trend during the first months of 2020 reaching a peak of 4.3 % in April 2020 before decreasing, reaching a low of 0.2 % in May 2021.

In contrast, the annual inflation rate for ‘housing, water, electricity, gas and other fuels’ was on a downward trend during the first months of 2020, with prices 0.6 % lower in May 2020 than a year earlier. However, prices began increasing again, taking the inflation rate to 3.7 % in May 2021.

www.ec.europa.eu/eurostat/