The German consumer prices for the month of June have just been published as a preliminary estimate by the Federal Statistical Office. They will rise by 0.9 per cent year-on-year after +0.6 per cent in May. In some countries in the Eurozone, things are already looking really bleak and deflation is on the cards. But for Germany, the all-clear can probably be given at present. Two factors can be mentioned here.
The following diagram shows it. On the one hand, food prices are now up 4.4 per cent year-on-year. This means that inflation in this area, which is important for consumers, remains constant, after +4.5 per cent in May. On the other hand, consumer prices for energy fell by “only” 6.2 per cent in June, after minus 8.5 per cent in May. After the gigantic oil price crash in spring, the oil price has recovered. This should now gradually push up energy prices for end consumers again. And then there are the well rising food prices. These effects are keeping prices in Germany away from the threshold of deflation for the time being.