Spain's inflation falls below European Central Bank's target

In May, Spain's inflation rate decreased to 1.9%, falling below the European Central Bank's (ECB) target of 2%. This figure represents the lowest level in seven months. According to Bloomberg, this development sets the stage for a potential interest rate cut next week.

The statistical agency says the slowdown in price growth is due to a drop in electricity costs and less spending on transportation and leisure activities. Meanwhile, core inflation, which excludes energy and particular food items, stood at 2.1%.

Earlier, ECB Deputy Chairman Luis de Guindos stated in Madrid that the consumer price targets would soon be met. Nonetheless, analysts at Bloomberg have underscored the risks posed by mounting inflation expectations among EU citizens, which have attained their zenith since February of the previous year.

The situation in Spain mirrors the broader trend across the eurozone, where inflation is also nearing target levels, as noted by the agency. The European Commission anticipates that the country's average yearly price growth rate will be 2.3%.