Economy · July 21, 2022

Germany Inflation June 2022

Harmonized consumer prices fell 0.17% from the month before June, in contrast to the 1.11% increase seen in May. The June result marked the first price decline since November 2020 and it was driven by the drop in prices for transport as well as for clothing and footwear over the previous month.

Harmonized inflation fell to 8.2% in June from 8.7% in May. However, the trend intensified, 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 aid package will end in August. This will also be the time when the temporary relief from primary inflation stops. Even if pricing power in both industry and services should have reached its peak, we still expect the passage of higher costs to last at least during the summer months, if not longer. The potential end of Russian gas for Germany is also likely to increase energy prices during the winter season. This makes a significant retreat in headline inflation highly unlikely by 2022. It will take until 2023 for the negative base effects to send the nominal rate back towards 2%. “

FocusEconomics speakers predict average inflation of 7.4% in 2022, which is up 0.7 percentage points from last month’s forecast and 3.7% in 2023.