BERLIN (Reuters) – Germany’s annual consumer price inflation declined in June but remained above the European Central Bank’s target close to but below 2%, the Federal Statistical Office said on Tuesday.
Consumer prices, harmonized to make them comparable with inflation data for other European Union countries, increased by 2.1% in June, compared to 2.4% in May.
The June reading was in line with a Reuters forecast.
The national consumer price index (CPI) slowed to 2.3% in June from 2.5% in May.
The preliminary inflation data for Germany does not include a harmonized figure for core inflation that excludes the most volatile components of the index, such as energy and food costs.
But a breakdown of the non-harmonized data showed that energy and food inflation rose slightly less in June, while rental and property prices accelerated at the same pace.
“There are increasing signs that the underlying pressure on prices is picking up slightly,” said Commerzbank (DE 🙂 economist Marco Wagner, adding that clothing, overnight stays and restaurant visits have become noticeably more. faces.
The German central bank earlier this month raised its inflation forecast to 2.6% this year, which would be the highest since 2008.
The Bundesbank has downplayed the significance of the increase, blaming it primarily on energy prices and tax effects. Without them, he said, inflation would stand at just 1%, in line with last year and well below the 2019 level.
The sudden rise in prices, which could cause inflation to touch 4% in the second half of 2021, could affect perceptions after a long period of low inflation and affect consumer behavior.
Citing the temporary nature of the price increases, both the central bank and the government expect inflation to moderate again next year despite an expected strong economic recovery.
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