Inflation in Germany rises to 6.4 percent Russian officer and suspected war criminal shot dead while jogging

Inflation once again weighed heavily on people in Germany in June. Consumer prices rose by 6.4 percent compared to the same month last year.

For example, the Federal Bureau of Statistics confirmed provisional data on Tuesday. Previously, inflation had weakened for three months in a row. In May that was still 6.1 percent. Economists speak of a special effect in June and expect inflation to fall further in the course of the year.

Relief measures are cancelled

“Food is still the strongest price driver. In addition, the federal government’s support measures from 2022 – 9 euros ticket and fuel discount – have a base effect that increases the current inflation rate,” explains Ruth Brand, chairman of the Authority.

A year ago, the measures limited to three months tempered the increase in consumer prices. This effect is now gone. Economists see the current increase mainly as a temporary phenomenon.

Despite the introduction of the Deutschlandticket, train tickets for local transport were 65.2 percent more expensive in June than one year previously. At 49 euros, the Deutschland ticket is significantly more expensive than the ticket of 9 euros.

The temporary reduction in excise duty on mineral oils also caused a slight decrease in fuel prices from May to the end of August 2022. However, it is not possible to quantify exactly whether the decrease is solely due to the tank discount.

Inflation has been a burden to consumers for months. It undermines their purchasing power. People can pay less for a euro. Financially less strong private households are particularly hard hit. Necessary expenses, such as food, rent and energy, tend to make up a larger portion of their budget than people with higher incomes.

Food drives up prices

Price drivers in June were once again food, which increased by 13.7 percent compared to the same month last year. After all, prices rose less than in May (14.9 percent). Dairy products (22.3 percent) and sugar, jam, honey and other confectionery (19.4 percent) had to be paid considerably more in June. Vegetables (18.8 percent) and bread and cereal products (18.3 percent) also became noticeably more expensive within a year.

Energy prices, which had risen sharply a year earlier as a result of the Russian war of aggression against Ukraine, rose by a total of 3 percent below average. Light heating oil became 36.5 percent cheaper within a year. On the other hand, natural gas (20.8 percent), electricity (10.5 percent) and district heating (9.3 percent) were more expensive.

ECB provides countermeasures

The harmonized consumer price index (HICP), which the European Central Bank (ECB) uses for its monetary policy, was 6.8 percent in Germany in June. Inflation in the common currency zone was 5.5 percent in June, up from 6.1 percent in May.

With a series of rate hikes, the ECB is bracing itself against high inflation in the euro area. Higher interest rates make loans more expensive. This can slow down demand and counter high inflation rates. In the medium term, the currency watchdogs aim for price stability in the euro area with an inflation rate of two percent. (awp/sda/dpa)