(RTTNews) - Germany's annual inflationrate accelerated in line with expectations in May, with the price growth largely driven by sharp increase in heating oil and motor fuel prices.
The annual inflation rate quickened to 1.2% in May from 1% in April, preliminary estimates from the Federal Statistical Office showed Thursday. The rate was in line with economists' expectations. Prices showed annual growth for the seventh month in a row.
A sharp increase in prices of heating oil and motor fuels continued to drive the annual inflation rate, while gas prices put a downward effect on the rate. Month-on-month, consumer prices rose 0.1%, matching expectations.
The harmonized index of consumer prices for Germany, calculated for EU purposes, also recorded an increase of 1.2% year-on-year in May, faster than 1% rise in the previous month.
Compared to the previous month, HICP rose 0.1% during the month. The annual as well as monthly HICP inflation was also consistent with analysts' forecasts.
Europe's largest economy grew 0.2% sequentially in the first quarter, supported by increased government spending and exports. The economy expanded for the fourth quarter in a row.
Germany's Federal Ministry of Economics and Technology had forecast 1.4% GDP growth this year and stronger 1.6% growth for 2011.
Meanwhile, in March, the International Monetary Fund slashed its 2010 growth outlook for Germany to 1.2% from the previously estimated 1.5%, citing weakness in the banking sector and the possibility of weaker-than-expected global trade.
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