German consumers hit by runaway prices
Inflation in the Eurozone’s leading economy, Germany, hit 6.4% in June in annual terms, its first rise since February, the Federal Statistical Office (Destatis) reported on Thursday.
According to preliminary data, the figure was up from 6.1% in the previous month.
When harmonized to compare with other EU countries, Germany’s inflation rate in June was 6.8% year-on-year.
Food prices have continued to show above-average growth in June compared with the same month of last year, according to Destatis. They rose 13.7%, increasing the burden on struggling consumers.
Energy prices were up 3% in June on an annual basis. According to the report, the federal government’s third relief package has contributed to the slowing of the energy price increase.
The German Council of Economic Experts (GCEE) earlier warned that inflation in the country could remain high for longer than expected, or even accelerate if monetary policy measures are offset by risks in financial markets. The GCEE said it expects an average inflation rate of 6.6% in 2023.
Meanwhile, the European Central Bank (ECB) has hiked interest rates to an unprecedented 4% in an attempt to combat high inflation. ECB President Christine Lagarde has said recently that a further rate increase in July was “very likely.”
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