Key facts
- US wholesale inflation surged to 6.5% in May.
- The US wholesale inflation rate in May was the highest since November 2022.
- India's inflation likely rose to 4.0% in May.
- Czech CPI inflation eased to 2.1% year-over-year in May.
- Ghana's annual inflation rate accelerated to 3.7% in May.
- Vietnam's CPI accelerated to 5.60% year-over-year in May.
- Indonesia's CPI inflation accelerated to 3.08% in May.
- Rising food prices were a primary driver for inflation in India, Ghana, and Indonesia.
- Energy prices significantly contributed to the US wholesale inflation surge.
- Core inflation in the Czech Republic decreased to an estimated 2.8%.
Global inflation figures for May present a varied economic landscape. In the United States, wholesale inflation, measured by the Producer Price Index (PPI), surged to an annual rate of 6.5% in May. This represents the highest level recorded since November 2022 and surpassed economists' forecasts of 6.4%. The increase was largely attributed to a significant spike in energy prices. Core PPI, which excludes volatile food and energy components, showed a more moderate rise of 4.9%.
Several Asian economies reported rising inflation. Vietnam's consumer price index (CPI) accelerated to 5.60% year-over-year in May, marking its third consecutive monthly increase and reaching a post-2020 high. This rise was driven by broad-based increases across housing, food, energy, and transport costs, with services inflation remaining persistent and core inflation challenging the full-year target. India's inflation likely climbed to 4.0% in May, nearing the Reserve Bank of India's target, primarily due to rising vegetable prices and higher fuel costs. This trend signals a potential shift from recent benign inflation levels, prompting vigilance from the central bank. Indonesia's year-on-year CPI inflation also accelerated, reaching 3.08% in May and exceeding the 2.97% consensus forecast. Rising food prices were the main driver, with annual pressures also stemming from personal care and transport costs. Bank Indonesia had previously raised rates by 50 basis points.
In contrast, the Czech Republic reported a slowdown in consumer price inflation. The Czech CPI eased to 2.1% year-over-year in May, falling below market expectations of 2.3%. This slowdown was broad-based, affecting both volatile prices and core inflation, which is estimated to have decreased to 2.8% year-over-year. Ghana's annual inflation rate accelerated to 3.7% in May, driven by a rise in food prices to 3.3%. Despite this increase, the central bank maintained its interest rate, expecting inflation to remain within its target band. The finance minister projects year-end inflation at 5% for Ghana.
The varied inflation data suggests differing economic pressures across regions, with some countries battling accelerating price growth while others see a moderation. The drivers range from energy and food costs to broader housing and transport expenses, prompting central banks to monitor these trends closely.