Euro-area inflation trends and GDP dynamics in 2023

Early in 2023, indicators from Eurostat pointed to a cooling trend in the euro area, with annual inflation easing to 6.1% in May, down from 7% the previous month. This aligns with some analysts’ expectations that inflation would continue to reduce toward roughly 6.3%. The same Eurostat release noted that the year ending May 2023 carried a higher inflation rate of 8.1% compared with May 2022, while consumer prices in May 2023 looked relatively stable against the prior year. Taken together, these numbers illustrate evolving price pressures across a wide range of consumer goods and services and signal a cooling inflation trajectory through the first half of 2023.