Brandenburg Gate in Berlin, Germany

Germany Inflation June 2022

Germany: Harmonized inflation moderates in June

Harmonized consumer prices fell 0.17% over the previous month in June, contrasting the 1.11% rise seen in May. June’s result marked the first drop in prices since November 2020 and it was driven by falling prices for transport, as well as clothing and footwear over the prior month.

Harmonized inflation fell to 8.2% in June from May’s 8.7%. Still, the trend pointed up, with annual average harmonized inflation rising to 5.8% in June (May: 5.3%).

Carsten Breski, Global Head of Macro at ING, added:

“The energy relief package will end in August. This will also be the moment when the temporary relief to headline inflation stops. Even if pricing power both in industry and services should have reached its peak, we still expect the pass-through from higher costs to last at least over the summer months if not longer. The potential end to Russian gas for Germany is also likely to increase energy prices going into the winter season. This makes any significant retreat of headline inflation highly unlikely for 2022. It will take until 2023 before negative base effects should send the headline rate towards 2% again.”

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