Janine Kraft, director of the Tante Enso store in Wörlitz, Germany, classifies goods on the shelves.
Photo alliance Photo alliance Gety pictures
The annual inflation rate in Germany unexpectedly decreased to 2 % in June, making the largest economy in Europe in line with the European Central Bank’s goal, Initial data from the Destatis Statistics Office The two showed.
Reuters expected analysts to read 2.2 % in the twelve months until June.
The German publication is coordinated across the euro area, allowing a direct comparison with other unified currencies. Consumer price index It fell to 2.1 % in the year to May.
Elsewhere in Europe, inflation readings in June showed a slight rise in the woven rate of France and Spain, but there is no change in Italy.
Franzeska Palace, an economist in Europe at Capital Economics, said that the latest inflation data will satisfy the European Central Bank, which is expected to reduce prices again in this session.
“In general, the numbers add to the evidence that inflation in the European region has returned sustainable to the goal. With the exception of a renewed increase in energy prices, we expect the headlines to reach 2.0 % this year, and that the European Central Bank is lowering a final price in September, as the deposit rate reached 1.75 %.”
The inflation data in the euro area is scheduled to reach Tuesday, when the address rate is expected to reach 2 % in June, according to analysts covered by Reuters.
Champagne contract?
While German data may relieve the European Central Bank that its function to re -inflation to a 2 % target “is often done”, external factors are still disturbing the inflation path, according to Carsten Barzeeski, the global president of Macro in Engy.
“Despite the celebrations of the European Central Bank, let us do not forget that inflation in the euro area was largely driven by external factors, and recently, by President Trump,” he pointed out in the email, noting that the prices of oil and euros are the strongest as important engines for the direction less.
However, the service enlargement is still high “at the levels that have not been seen since the mid -nineties before the epidemic,” BRZESKI noticed, and it is expected to decrease only 3 % next year.
“This continuous pressure should admire any premature celebrations in the European Central Bank,” he said.
An expected lighting of the 75th anniversary of the Shoman Declaration, in the Grosarkalil Building at the European Central Bank headquarters in Frankfurt, Germany, on May 9, 2025.
Alex Kraus/Bloomberg via Getti Ims
Moreover, the continuous inflation process depends significantly on oil prices, “and the last two weeks showed the extent of these prices,” referring to a sharp rise in oil prices as Israel and Iran launched attacks on each other.
“At the present time, in the absence of another introductory shock after the end of the 90 -day stopping in less than two weeks from now, we expect the European Central Bank to stop at the next meeting in July, and to keep the option open to reduce the other interest rate at the September meeting, if the refining direction continues,” said Brzeski.
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