German Inflation Slows For Second Month

Germany’s consumer price inflation eased for a second month in a row in July amid an easing in energy price rise, preliminary figures from Destatis showed Thursday.

The consumer price index rose 7.5 percent year-on-year after a 7.6 percent increase in June. Economists had forecast 7.4 percent inflation.

In May, headline inflation hit a record high 7.9 percent.

The harmonized index of consumer prices, or HICP, rose 8.5 percent year-on-year following an 8.2 percent increase in June. Economists had forecast an 8.1 percent increase.

Energy inflation slowed further in July with the rate of increase easing to 35.7 percent from 38.0 percent in June. The rate of energy inflation has been high since the war in Ukraine began and consequently, the supply of Russian gas was interrupted.

On the other hand, food price inflation accelerated to 14.8 percent from 12.7 percent.

Services costs grew 2.0 percent annually after a 2.1 percent increase in the previous month. Rents rose 1.8 percent following a 1.7 percent climb in June.

Compared to the previous month, the CPI rose 0.9 percent in July after a 0.1 percent increase in June.

The EU measure of inflation, HICP, climbed 0.8 percent following a 0.1 percent decline in the previous month.

Economists had forecast a 0.6 percent increase in the CPI and a 0.4 percent rise in the HICP.

Marked price increases at the upstream stages in the economic process have an upward effect on prices, Destatis said.

The statistical office attributed the high inflation also to interruptions in supply chains caused by the Covid-19 pandemic.

“Special effects such as the impact of the 9-euro ticket and the fuel discount are included in the results,” Destatis said.

“It is not possible yet on the basis of the provisional results to show the exact extent of these effects.”

Destatis is scheduled to release the final and detailed data for July CPI and HICP on August 10.

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