BRUSSELS — Eurozone inflation eased at a quicker pace than expected in May, EU figures showed Thursday, giving the struggling 17-nation bloc a rare piece of good news.
Annual inflation slowed to 2.4 percent in May compared with 2.6 percent in April and 2.7 percent in March, according to Eurostat data agency.
While the inflation rate topped the European Central Bank's ceiling of just under 2.0 percent for the 18th month running, the May figure was better than the average analyst forecast of 2.5 percent compiled by Dow Jones Newswires.
The first estimate was published less than a week before the ECB's next policy meeting and could influence the Frankfurt-based bank's decision on whether to lower its main interest rate, currently at a record low of 1.0 percent.
The easing of inflation in May was an "all too rare" piece of good news for the crisis-struck eurozone, said Howard Archer, chief European economist at IHS Global Insight.
"May's drop in consumer price inflation eases the squeeze on consumers' purchasing power, thereby providing much needed support to growth," he said.
"It also facilitates an interest rate cut by the ECB sooner rather than later, and there is an ever more compelling case for this given the current deteriorating economic growth environment in the eurozone and the heightened uncertainty stemming from the situations in both Greece and Spain."
But Archer voiced doubt that the ECB would lower its rate at the June 6 meeting because the bank will likely wait for the outcome of elections in Greece on June 17, which could affect the country's future in the eurozone.
Capital Economics analyst Ben May said the fall in inflation and a drop in German unemployment "do not alter our view that economic prospects will worsen over the remainder of the year."
"The recent sharp falls in measures of business sentiment and activity and the deepening debt crisis mean that the economic outlook remains bleak," May said.
Inflation looks set to continue dropping as energy and food prices ease further, albeit at a "slow-motion" pace, said ING bank analyst Martin van Vliet.
"Indeed, with the tumbling euro pushing up import prices and the increases in indirect taxes ... it may take until early next year before headline inflation is back below the ECB's target of below but close to 2.0 percent," he said.
"That said, the persistent economic downturn in the Eurozone is likely to keep underlying inflation low for a protracted period," the analyst said.
He added: "The implication is that although the ECB will likely keep interest rates on hold next week, ECB president (Mario) Draghi could open the door to further monetary easing later this year.
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