German Inflation Slows In June

Inflation in Germany slowed slightly in June but stuck close to the level targeted by the European Central Bank, preliminary official data showed Thursday.

Frankfurt am Main, (APP - UrduPoint / Pakistan Point News - 28th Jun, 2018 ) :Inflation in Germany slowed slightly in June but stuck close to the level targeted by the European Central Bank, preliminary official data showed Thursday.

Prices added 2.1 percent year-on-year this month, Federal statistics authority Destatis said, shedding 0.1 percentage point compared with May's figure.

Inflation reached the same level when measured using the Harmonised Index of Consumer prices (HICP) yardstick preferred by the European Central Bank.

Policymakers at the Frankfurt institution will be eyeing price growth data from across the 19-nation eurozone closely after their decision this month to wind down their mass bond-buying programme.

Along with historic low interest rates, the ECB's 30 billion Euros ($35 billion) per month of government and corporate purchases are designed to stoke growth and power inflation towards its target of just below 2.0 percent.

Seeing inflation headed towards the bank's goal, governors decided to slash purchases to 15 billion euros per month from October before ending them altogether in December.

"Progress towards a sustained adjustment in inflation has been substantial" since bond-buying began, Draghi said as he announced the decision.

But the strong growth seen at the end of 2017 has ebbed this year, while much of the higher price growth seen in the eurozone is down to energy price inflation.

In Germany, energy inflation leapt to 6.4 percent in June, compared with 5.1 percent last month and just 1.3 percent in April.

Analyst Jens-Oliver Niklasch of LBBW bank judged that "core" inflation -- excluding the most volatile goods like food and energy -- is "no cause for concern", running at around 1.5 percent.

Meanwhile, economist Carsten Brzeski of ING Diba bank pointed to "new disinflationary forces" following Germany's exit from the World Cup.

"Expect large discounts and price reductions on all World Cup and national team merchandising in the coming days," he predicted.