German yearly inflation rate increases to 2.3 percent last month

(MENAFN) On Friday, Germany's federal statistical bureau Destatis reported that the country’s annual inflation rate reached 2.3 percent in July, marking a slight increase from 2.2 percent in June. This marginal rise in inflation is attributed to a combination of factors, despite a general dampening effect from weaker energy prices. Ruth Brand, the head of Destatis, noted that while energy prices have exerted downward pressure on inflation, there have been notable above-average increases in service prices contributing to the overall inflation rate.

In July 2024, energy product prices experienced a year-on-year decline of 1.7 percent, reflecting reduced costs in this sector. In contrast, food prices saw an increase of 1.3 percent over the same period, contributing to the inflationary pressures. When energy prices are excluded from the calculation, the inflation rate stood at a higher 2.7 percent, indicating that other components of the consumer price index were driving inflation more significantly.

Service prices, in particular, have been a significant factor in the rising inflation rate. The cost of services surged by 3.9 percent year-on-year in July, highlighting a substantial increase in this sector. This rise in service prices has been a key contributor to the overall inflation, offsetting the deflationary impact of lower energy prices.

On a monthly basis, consumer prices in Germany increased by 0.3 percent in July. This month-on-month rise reflects ongoing inflationary pressures within the economy, driven by the higher costs of services and food, despite the retreat in energy prices.

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