2024-07-31 02:04:44
The Federal Statistical Office has published the first estimate for the inflation rate in July. Experts had expected a lower value.
The inflation rate in Germany rose unexpectedly in July. Consumer prices rose by an average of 2.3 percent compared to the same month last year, the Federal Statistical Office announced on Tuesday. The data is based on an initial estimate. Economists surveyed by the Reuters news agency had expected the inflation rate to remain at the June level of 2.2 percent. From June to July, prices rose by 0.3 percent.
The main driver of inflation in July was services. These rose by an average of 3.9 percent. Economists attribute this to significantly higher wages. Many companies are passing on the higher personnel costs to their customers.
Energy, on the other hand, became cheaper by 1.7 percent. Food cost an average of 1.3 percent more than in July 2023. The so-called core inflation rate – which excludes fluctuating energy and food prices – remained at 2.9 percent.
Economists at Deutsche Bank Research expect an average inflation rate of 2.2 percent for the whole of 2024. It is then expected to fall to 2.1 percent in 2025. Last year, the cost of living in this country rose by an average of 5.9 percent – mainly due to expensive food.
According to the July survey by the Ifo Institute, slightly more companies, especially in industry, plan to raise their prices than in the previous month, while consumer-related sectors are less likely to plan to increase prices. The inflation rate is therefore likely to fall in the coming months, said Ifo economic expert Sascha Möhrle.
The European Central Bank’s (ECB) inflation target is two percent. The financial markets are speculating on the next interest rate cut in September. The ECB had made the interest rate turnaround downwards in June and made the further course dependent on the data situation.