Inflation falls slightly in June

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Inflation in Germany slowed down somewhat in June. Consumer prices are expected to have risen by 7.6 percent year-on-year. In May, the inflation rate was still 7.9 percent.

< p>Fuel discounts, nine-euro tickets and lower oil prices dampened inflation in Germany in June. Goods and services cost an average of just 7.6 percent more than a year earlier, as the Federal Statistical Office announced on Wednesday.

Some economists, on the other hand, had expected an increase to 8.0 percent. In May, the rate of inflation was 7.9 percent, the highest since the winter of 1973/74.

The June figures that have now been published are only an initial estimate, it is true It is quite possible that there will still be deviations in the final calculation. 

At 38.0 percent, energy prices in June were not quite as high as in May at 38.3 percent. Food, on the other hand, cost 12.7 percent more than in June 2021. Here, the upward trend in prices accelerated (May: +11.1 percent). 2.1 (May: +2.9) percent more had to be paid for services.

The Inflation rates in the past year: May was the high point for the time being, and there is no sign of relaxation

Inflation will remain high

Experts do not see a sustained relaxation in prices for the time being. “You shouldn't let sand be thrown in your eyes,” said DekaBank chief economist Ulrich Kater. “It's the fiscal relief measures in particular that have brought inflation down a bit.” The fuel discount and the nine-euro ticket for local public transport should temporarily slow things down.

“But that doesn't get us past the fact that we will measure inflation rates of over seven percent in Germany by the end of the year,” said Kater. Only from January 2023 is it likely to go down if new crises do not break out.

Despite the “Tank discounts” keep fuel prices high, and low earners in particular suffer from this

The fuel discount has “hardly arrived”

The Ukraine war is driving up prices for energy, raw materials and, most recently, food. The federal government has therefore put together a package worth billions to achieve relaxation. The energy tax on fuels, for example, has been reduced to “the European minimum” for a limited period of three months since June 1, which, according to the Ministry of Finance, means 30 cents per liter less for petrol and 14 cents for diesel. At the same time, a ticket for nine euros per month was introduced for 90 days in public transport.

The tax relief on fuel that applied from the beginning of June to the end of August has so far hardly reached consumers, complained the ADAC. According to the automobile club, both fuels are comparatively too expensive, despite recent declines.

Consumers perceive prices to be rising much faster than officially measured: the perceived inflation rate is currently almost 18 percent, said DekaBank chief economist Kater . “That's also historically high.” Many households would have to resort to savings to make ends meet.

dk/bea (dpa, rtr, afp)