Life in Germany was more expensive again in August. Consumer prices were 2.2 percent above the level of the previous year, as the Federal Statistical Office announced on the basis of preliminary figures. For June and July, the Wiesbaden statisticians had calculated an inflation rate of 2.0 percent. From July to August of the current year, prices rose by 0.1 percent.
The higher the inflation rate, the lower the people’s purchasing power: they can then afford less for one euro. Although the large wave of inflation has expired for the time being, which Germany recorded against Ukraine after the beginning of the Russian attack war, for example, increased food prices burden many consumers.
Real wages increased further
After all, many employees also have more money in their pockets: According to the Federal Statistical Office, wages increased again with 4.1 percent in the second quarter of this year than consumers: internal prices. This results in a increase in real wage by 1.9 percent at the same period last year. Loss of purchasing power, especially from 2022 and 2023, are thus increasingly balanced.
Inflation without food and energy remains increased
The core inflation – i.e. the rate without the fluctuating prices for food and energy – was unchanged at 2.7 percent in August. In August, people in Germany had to pay 2.5 percent more than a year earlier. In July, food prices had still increased by 2.2 percent. At the top in March it was 3.0 percent.
“Temporary inflation rate temporarily a little higher”
According to the preliminary calculations of the statisticians, energy was 2.4 percent cheaper than a year earlier in August. In August a year ago, however, energy prices had dropped much more clearly. In the year comparison, this now acts like a price increase – a so -called basic effect that drives the current inflation rate up.
The Bundesbank referred to this in its latest monthly report: “In the next few months, the inflation rate should temporarily be a bit higher.” Other economists had also expected that life in Germany have been more expensive in August than in the past two months.
Moderate inflation awaits after price wave
For the whole year, economists expect an inflation rate of around two percent for Europe’s largest economy. In the medium term 2.0 percent inflation, the European Central Bank (ECB) sees its goal of stable prices and thus a stable currency for the euro area as a whole. Permanently low prices, as well as too rising prices, are a risk of the economy: Companies and consumers could put investments in the expectation that it will soon become even cheaper.
In 2022, inflation in Germany was 6.9 percent high, in 2023 it was 5.9 percent. After the Russian attack on Ukraine 2022, the prices for energy and food climbed. In the past year, the inflation dropped to 2.2 percent.
Services are no longer more expensive
In the past few months, the above -average inflation has also decreased for services, which include visits to the restaurant, car repairs and insurance. In August, however, things did not go down: Services were 3.1 percent more expensive than a year earlier. A reason for the increased prices for services are increased wages.