By Scott Kanowsky

Investing.com -- German consumer prices in May inched higher on a monthly basis to 0.9% from 0.8%, according to a final CPI reading from the Federal Statistical Office on Tuesday, as inflationary pressure deepens on Europe's largest economy.

The annual figure also jumped to 7.9% in May, up from 7.4% in the previous month, suggesting that the European Central Bank will face a challenge in its bid to control soaring inflation.

The data comes after Germany's central bank warned last week that inflation would rise by 7.1% in 2022 - far above its previous estimate of 3.6% in December. The Bundesbank added that higher prices are also set to linger into next year, with the 2023 inflation forecast now seen higher at 4.5% from 2.2%.

“Inflation this year will be even stronger than it was at the beginning of the 1980s,” said Bundesbank president Joachim Nagel in a statement.

“Price pressures have even intensified again recently, which is not fully reflected in the present projections.”

The Bundesbank also cut its growth projections for the year due in part to the impact of the war in Ukraine. German GDP is now estimated to come in at 1.9% this year - more than halving the prior forecast of 4.2%.

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