top of page

Title: Germany's State Inflation Falls as Rail Giveaway, Fuel Tax Cut Take Effect

  • Writer: analysiswatch
    analysiswatch
  • Jun 29, 2022
  • 2 min read

Jun 29, 2022 02:46AM ET


By: AnalysisWatch


Inflation in Europe's largest economy likely slowed in June after government measures to cut fuel prices and rail fares took effect,


The state of North Rhine-Westphalia, Germany's most populous, said consumer prices fell 0.1% in June from the previous month, bringing the annual inflation rate down to 7.5% from 8.1%. This was the first decline in the annual rate since January and has fueled hopes that headline inflation may have peaked in Germany and more broadly across the eurozone. In Germany, the consumer price index rose by 8.0% in the year to May and by as much as 8.8% under the EU's harmonized method.


Elsewhere in the euro zone, the situation was less encouraging: inflation data for Spain showed that price increases accelerated to 1.8% under the harmonized method and annual inflation reached a new 30-year high of 10.0%.


The introduction of the so-called 9-euro ticket on Deutsche Bahn led to a 69% month-on-month and 68.4% year-on-year reduction in prices for combined journeys. Similarly, fuel prices fell by 3.3% in May after the government cut the tax on gasoline in an effort to lower prices. This tax cut is limited to three months.


Thus, neither of the two factors that led to this decline reflects a sustained improvement in underlying price dynamics. Rents rose by 0.2% and restaurant and hotel costs by 1.2%. Prices for package tours rose by more than 16%, reflecting the seasonal increase in demand.


The Free State of Bavaria later also reported a slight decline in the annual inflation rate, from 8.1% to 7.9%. However, the underlying pressure was more noticeable, with monthly inflation still at 0.2%. Other key German states will present their CPI figures later this morning. A preliminary figure for Germany as a whole will be released at 8 AM ET.

Comments


2b94f773-a237-4da7-a599-6b42314ed9e6.png

Risk Disclosure: AnalysisWatch will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Currency trading on margin involves high risk, and is not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite.
AnalysisWatch would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore AnalysisWatch doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.

bottom of page