(MENAFN- Trend News Agency)
German consumers must brace for higher food costs in the coming
months, the Munich-based research center the ifo Institute said on
Friday, Trend reports citing Xinhua
With almost all food retailers planning further price increases,
as well as retailers in other sectors, head of forecasts at ifo
Timo Wollmershaeuser said inflation rates are expected to 'remain
high for the time being.'
Overall consumer prices in Germany slowed down in June, with
inflation falling to 7.6 percent, according to preliminary figures
by the Federal Statistical Office (Destatis). Energy prices
continued to be the main driver, but food prices were also up 12.7
percent year-on-year.
Back in May, inflation in Europe's largest economy peaked at 7.9
percent, the highest level since the first oil crisis in the winter
of 1973/1974, according to Destatis.
A growing number of German consumers is troubled by rising
prices, with 40 percent saying that high inflation is causing
'major problems,' according to the latest Politbarometer
survey.
Consumer sentiment in the country is 'continuing its downward
spiral,' the Nuremberg-based market research institute GfK warned
earlier this week. The increased cost of living in particular is
lowering available incomes.
In order to push record inflation rates across Europe below the
target of 2 percent in the medium term, the European Central Bank
(ECB) announced it will raise its key interest rate by 25 basis
points in July.
'I don't think we are going to go back to that environment of
low inflation,' said ECB President Christine Lagarde at the
European Central Bank Forum in Sintra, Portugal on Wednesday.
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