Inflation in Germany fell again slightly

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Inflation in Germany is still well above the seven percent mark. However, the price hike has slowed somewhat for the second month in a row.

The high inflation in Germany weakened slightly in July for the second month in a row. Goods and services cost an average of just 7.5 percent more than a year earlier, as the Federal Statistical Office announced on Thursday. Economists surveyed by Reuters had expected 7.4 percent. In June the annual inflation rate was 7.6 percent and in May it was 7.9 percent. The figures seem to confirm what the Munich Ifo Institute reported in the morning: that inflation in Germany is likely to have peaked.

According to the Ifo Institute, the latest data indicate that inflation is easing. According to the latest survey by the Munich researchers, the proportion of companies surveyed that want to raise their prices in the next three months has continued to decrease. Companies' price expectations fell for the third time in a row in July.

The indicator fell to 47.4 points from 52.9 previously, as the institute further announced on Thursday: “Although prices are likely to continue to rise, the pace will slow down. Inflation is likely to have peaked and will continue to gradually decrease in the second half of the year,” said Ifo economics chief Timo Wollmershäuser.

Food trade bucking the trend

According to the expert, the price expectations of companies are usually reflected in consumer prices with a few months lag. low. Price expectations have fallen noticeably, especially in those sectors of the economy whose production is upstream of consumption. These include construction and industry. According to the Ifo, prices should also rise more slowly in consumer-related services (hospitality, leisure, culture, entertainment).

Only in the food retail sector is there no end in sight to the noticeable rise in prices. As in the previous months, all retailers surveyed by the Ifo stated that they wanted to raise their prices.

  • Inflation: When everything gets more expensive

    Energy is becoming a scarce commodity

    The biggest driver of inflation is the massive rise in energy prices. According to the comparison portal Check24, they have increased by 58 percent year-on-year. In view of the still uncertain situation, there is unlikely to be any relaxation in sight. This puts a strain on industry and consumers alike.

  • Inflation: if everything becomes more expensive

    The price of warmth

    Consumers have to be prepared for an expensive winter, at least according to official government figures, which show that heating oil is already 89 percent more expensive in June 2022 than in June last year. According to Statista, at around 123 cents per liter, heating oil was more expensive than ever in Germany. For comparison: Just six years ago, a liter cost 49 cents.

  • Inflation: When everything gets more expensive

    Including drivers suffer

    Conventional fuels are also badly affected: Diesel cost 2.14 euros in March – a historic high. The increase in fuel prices has a direct impact on consumers and contributes to the inflation of many imported goods, as they often have to be paid for in dollars. The “tank discount” provides some relief at the pump, but only until the end of August.

  • Inflation: When everything gets more expensive

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    Electricity is also increasingly becoming a luxury good. According to the comparison portal Verivox, electricity costs increased by 32 percent within a year to 40.64 cents per kilowatt hour. Measures such as the abolition of the so-called EEG surcharge relieve consumers for a short time, but are practically eaten up by the rising basic price.

  • Inflation: When everything gets more expensive

    Full cupboards, empty purses

    Inflation has also arrived in the supermarkets – with worrying consequences, especially for people on a tight budget. According to the Federal Statistical Office, food costs a total of around 12.7 percent more than last year. Although there are signs that the inflation wave will subside again in the coming months, optimism is still limited at the moment.

  • Inflation: When everything gets more expensive

    Butter crisis

    Some people will have to adjust to bread without butter in the coming months. Because many butter brands break the three-euro mark. Dairy farmers are suffering from the consequences of the Ukraine war, which is driving up import costs for feed and other production costs. Consumers are therefore increasingly turning to discounters' own brands.

  • Inflation: when everything gets more expensive

    The small oil crisis

    It's not just oil that's becoming scarce as a result of the Ukraine war: 65 percent of the world's sunflower oil comes from Ukraine and Russia. As a result of the Russian invasion, transport has come to a standstill, especially from the Black Sea ports. With noticeable consequences: from April to May alone, sunflower and rapeseed oils were 23.2 percent more expensive.

  • Inflation: when everything becomes more expensive

    No bread without flour

    Wheat flour is also affected by the price surge. And that's where prices go up particularly vertically: A kilo of wheat flour costs around 93 cents in the first half of 2022 – an increase of a whole 127 percent compared to the previous year. It can therefore be expected that many other goods, especially bread, will also continue to become more expensive.

  • Inflation: When everything gets more expensive

    There's cheaper!

    Has everything really gotten more expensive? No, thanks to the time-limited 9-euro ticket, train travel has become cheaper, according to the Federal Statistical Office by ten percent. So-called “combined passenger transport services” were even cheaper by 62 percent.

    Author: Nicholas Merl


ul/hb (rtr, dpa, afp )

The article has been updated with the current inflation rate.