2023-09-28 15:35:00
German inflation fell to its lowest level in two years following the effect of great discounts on public transport from last summer.
Consumer prices increased 4.3% year-on-year in September, which compares to 6.4% in Augustthe statistics office reported on Thursday.
While this is the slowest pace since the Russian invasion of Ukraine skyrocketed energy costs, The figure is more than double the European Central Bank’s 2% target for the eurozone, made up of 20 nations. Prices They rose 0.2% compared to the previous month.
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Data from the largest European economy will consolidate expectations that the ECBUnless there is a surprise, stop raising interest rates following an unprecedented streak of 10 consecutive increases. This does not mean that a cut is imminent: authorities say that will keep borrowing costs at restrictive levels for an extended period so that prices return to the target.
As markets move closer to the idea of “higher for longer,” figures released Thursday in Spain showed that inflation in the country rose to 3.2% this month due to electricity and fuel costs. Citing the advance of oil, which has placed prices close to US$100 per barrel, the central bank of that country predictsThere will be a further acceleration to 4.3% in 2024.
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This is one of the upside risks for the ECB prediction that euro zone inflation will return to 2% in the second half of 2025. According to another report from the European Commission, consumer inflation expectations are at its highest level since May.
There are also downside risks in the face of the deterioration of the region’s economy. German production will contract 0.6% this year, according to the new forecasts of five institutes that advise the Government, a more pessimistic vision than that of the International Monetary Fund and the European Commission. The institutes predict that this year’s inflation, of 6.1%, is reduced to 2.6% in 2024 and 1.9% in 2025.
Translated by Paulina Munita.
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