May inflation rises in France, Germany, Spain amid impact of Iran war

France, Germany and Spain saw inflation rises in May amid impact of the U.S.-Israeli war on Iran, said the three countries’ respective statistical authorities on Friday.

France’s consumer price index (CPI) rose 2.4 percent year on year in May, up from 2.2 percent in April, according to data released by the French National Institute of Statistics and Economic Studies (INSEE) on Friday.

The rise in inflation was driven mainly by a further growth in energy prices, which jumped 16.6 percent in May from a year earlier, up from 14.3 percent in April. INSEE said the surge was largely due to gas prices, which went up 11.3 percent after declining 3.1 percent in the previous month.

Service prices were up 2.1 percent year on year in May, higher than the rise of 1.8 percent in April.

By contrast, food price growth slowed slightly to 1.1 percent from 1.2 percent previously.

Core inflation stood at 1.5 percent year on year in May, up from 1.2 percent in April, INSEE said.

The May inflation rate in Germany stood at 2.6 percent year on year, slowing from 2.9 percent in April, the Federal Statistical Office said on Friday.

The prices of energy products were 6.6 percent higher in May than one year earlier, “primarily due to the price developments on the crude oil market in the wake of” the war in Iran and other parts of the Middle East, said the office, noting that the year-on-year increase in energy prices in May was much lower than the 10.1-percent surge in April.

Germany’s service prices went up 3.1 percent year on year in May, food prices were up 0.4 percent, with the core inflation rate (excluding food and energy) reaching 2.5 percent.

Spain’s inflation rose 3.2 percent year on year in May, the same as in April, in the midst of the impact of the U.S.-Israeli war on Iran, said the National Statistics Institute (INE) on Friday.

The country’s prices of entertainment, sports and cultural activities rose by 2.6 percent year on year in May, when transportation prices increased by 7.4 percent from a year earlier.

Spain’s core inflation in May rose to 3 percent, 0.2 percentage point higher than in April.

Germany is looking to strengthen cooperation with China as officials and business leaders from both sides met at a forum in Berlin on Thursday to discuss expanding trade and investment ties.

The forum, hosted by the German Chamber of Commerce and Industry alongside a promotion event for the ninth China International Import Expo (CIIE), focused on ways to keep the trading relationship relevant and to explore new areas of cooperation ahead of the next edition of expo scheduled in Shanghai in November.

“The [bilateral] trading relationship, first and foremost, is essential. And it has been for decades. And you know, our event today is all about also figuring out how we can keep it relevant and how we also can develop new areas of cooperation. This event is also all about exporting more to China again,” said Thomas Konig, director China at the German Chamber of Commerce and Industry (DIHK).

Germany and China have maintained strong trade ties for decades, with Germany remaining one of China’s key economic partners in Europe.

Officials at the forum said expanding imports from Germany could create new opportunities for cooperation in sectors including aviation, automotive manufacturing, healthcare and industrial equipment.

Ling Ji, vice minister of commerce of China and deputy China international trade representative, said China is willing to increase imports of high-quality German products, technologies and services as part of efforts to promote more balanced bilateral trade.

China, home to the world’s largest middle-income population and the world’s second-largest consumer market, launched its “Export to China” initiative last year to help foreign companies access the Chinese market, Ling said.

The discussions come at a time of global economic uncertainty, trade tensions and concerns over trade imbalances.

German officials stressed that cooperation must continue, but future growth depends on balance.

“In the end, there cannot be winners on only one side. We must make sure there are winners on all sides,” said Thomas Steffen, state secretary with the German Federal Ministry for Economic Affairs and Energy.

He stressed the need to make the cake bigger for everyone.

Industry groups pointed to opportunities in medical technology, artificial intelligence, advanced manufacturing and the green transition.

“Just look into the future, med-tech. You have the waste management, you have the circular economy, you have AI, you have quantum technology, you have smart manufacturing. German innovators are ready to do their part and to contribute,” said Konig.

According to the organizers, the CIIE will once again bring together thousands of companies from around the world, all hoping to turn today’s conversations into tomorrow’s contracts.