Data released on Tuesday showed that inflation slowed in December in Germany more than expected. The Consumer Price Index (CPI) fell to 8.6% in December, compared to 10% in November. Commerzbank Chief Economist Dr. Jörg Krämer noted that core inflation continued to rise, adding that inflation is likely to pick up again in January.
Extraordinary government payments reduced inflation
“German inflation fell sharply from 10.0% to 8.6%, mainly because the government took over the monthly gas payments for many citizens in December.”
“If energy and food prices are excluded, core inflation continued to rise in December, from 5.0% to an estimated 5.1%. This shows once again the strong impact of the special effects in December and that there is no real relief of inflationary pressure.
“Inflation is likely to rise again in January because the government will no longer take over gas and district heating payments. However, inflation is unlikely to return to double digits. This is because The statisticians will take into account the brakes on the prices of electricity and gas in the price statistics from January.”
“Germans will continue to suffer from high inflation for a long time due to the slowness of the ECB, although the brakes on gas and electricity prices should depress inflation this year.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
