2023-07-28 12:35:46
A small glimmer of hope for consumers in Germany: After the recent increase, inflation weakened once more somewhat in July. Consumer prices rose by 6.2 percent compared to the same month last year, as the German Federal Statistical Office announced on Friday in an initial estimate. In June, the annual inflation rate was 6.4 percent, following 6.1 percent in May.
Compared to June, consumer prices rose by a total of 0.3 percent in July.
High inflation has been a burden for consumers for months. It saps their purchasing power. People can afford less for one euro. Many limit their consumption. This has consequences for the economy, for which private consumption is an important pillar.
Price drivers in July were once more food, which rose by 11.0 percent compared to the same month last year. After all, prices rose less than in June (13.7 percent).
At 5.7 percent, energy prices rose somewhat more sharply than in June. The background to this is a special effect due to the elimination of the EEG surcharge on July 1, 2022. The German government is trying to reduce energy prices: the price brakes for natural gas, electricity and district heating that apply retroactively to January 1 are intended to dampen the increase.
According to data from the state statistical offices, Germans also had to pay for visits to restaurants, overnight stays in hotels and guesthouses and package tours in July, in some cases significantly more than a year earlier.
In the previous year, the 9-euro ticket for local transport introduced in June 2022 and limited to three months temporarily dampened price increases. This effect does not apply this year. The Germany ticket launched in May 2023 is significantly more expensive at 49 euros.
Economists give people in Germany little hope of a quick, thorough relaxation in prices. A current survey by the Ifo Institute indicates that inflation will decline rather slowly. The so-called price expectations of companies increased once more for the first time since last autumn. Accordingly, further price increases are in sight, especially in the retail and food trade. In the manufacturing industry, however, the price increase has probably stopped.
Inflation is now a long way from its highest level since reunification at 8.8 percent in autumn 2022.
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