Berlin (Reuters) – Inflation in Germany has subsided in June. Goods and services cost an average of only 0.3 per cent more than a year ago, as the Federal Statistical Office announced on Tuesday and thus a first estimate of the end of June confirmed.
Last time was the annual inflation rate increased four months in a row in May, it was still 0.7 percent. Reason for the slowdown in June, is that refueling, heating and travel further became cheaper, while the prices of food and services rose more slowly than before. Economists nevertheless assume that the inflation rate by year-end picks up again. “Starting in the fall, it is likely to slowly go up,” said analyst Peter Meister of BHF-Bank.
In January, prices decreased by 0.3 percent, it was the first decline since the Great Depression of 2009. This had stoked fears of deflation, ie a harmful economic decline in prices across the board. Since then, prices have risen again – not least because the massive bond purchase program of the European Central Bank showed (ECB) effect. The ECB speaks only at values of less than two percent of stable prices. After comparable data at European level, the German annual inflation rate in June was even only 0.1 percent.
For some months now stands or falls with inflation from energy prices, which tumbled by almost six per cent in June. Refuelling was nearly eight percent cheaper than a year ago, even domestic fuel 19 percent cheaper. Excluding the energy, the annual inflation rate would have been, according to the statisticians significantly higher at 1.1 percent. Economists assume that prices evolve in the coming months still moderate. “This is also the high wage agreements provide, however, the effect the low energy and import prices contrary,” said BayernLB expert Stefan Kipar. At the turn he expects a noticeable increase in inflation of about 1.5 percent.
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