Inflation in Germany fell more than expected in June, according to provisional figures published on Monday, continuing on the downward trajectory observed since the start of the year.
The consumer price index increased by 2.0% over a year, finding for the first time of the year the objective set by the ECB for the entire euro zone, said the DESTATIS Institute.
Experts from the Factseet financial platform had toured a slight acceleration, at 2.2% over one year, compared to 2.1% last month.
Inflation regains its level last October, after an acceleration at the end of the year, and a continuous drop since early 2025.
The global disinflation movement has continued, since the peak of October 2022 to 8%, caused by the historic increase in energy costs in the wake of war in Ukraine.
In detail, this decline was favored by the drop in food, clothing, and energy prices, explains Carsten Brzeski, Ing bank economist.
The increase in consumer prices increased in June in the other large economies in the euro area, France and Italy, but with inflation rates that remain lower than those of Germany.
“These positive figures should reinforce the idea that the work of the ECB to bring inflation to its objective is finished,” said Brzeski.
After having drastically increased its interest rates to bring inflation to its target of 2.0% per year in the euro zone, the European Central Bank has been relaxing its monetary policy for a year to support the price stabilization process and support economic activity.
“In the future, at least in the short term, German inflation should continue its downward trend, probably falling below 2 % in the coming months,” according to Mr. Brzeski.
On Monday, the Frankfurt institution, however, warned that new challenges, ranging from trade and geopolitical tensions to artificial intelligence and climate change, could make the rise in prices more volatile, justifying a more flexible monetary policy strategy.
The uncertainty around commercial negotiations between Washington and its partners weighs on economic prospects, which prompted the ECB to revise its inflation forecasts for 2025 (2.0 %) and 2026 (1.6 %) in early June.
This article was published automatically. Sources: ATS / AWP / AFP
