Downside surprise now expected for German CPI in June thanks to one-off government measures
The cost of living in Germany is expected to surprise to the downside in May, but only because of government measures meant to dampen rising inflation.
Regional data for the provinces of North Rhine-Westphalia, Brandenburg, Bavaria and Saxony all registered year-on-year falls.
The headline Consumer Price Index in the latter, which Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, described as "usually a good proxy for the national numbers", dropped from 8.0% for May to 7.7% in June.
Nevertheless, Vistesen credited the declines in regional CPIs to temporary government measures, which were set to run for three months, such as a cut to a fuel duty and the introduction of big discounts on rail fares.
In the case of Saxony, that led to a drop in the rate of increase for transportation costs from 16.9% to 8.7% with prices in that category 6.4% lower month-on-month.
But there was scant evidence of a retreat in inflation elsewhere, he added.
Preliminary CPI data for all of Germany were scheduled for release at 1300 BST.