Tank discount and 9 euro ticket
Prices are rising more – the reason is special effects
06/29/2023, 2:03 p.m
A year ago, the federal government relieved consumers of the high price increases with a discount on tank fillings and a train ticket at a special price. The aid ended after three months. However, they are now reflected in the inflation rate.
The inflation rate in Germany rose again in June for the first time after three declines in a row. Goods and services cost an average of 6.4 percent more than a year earlier, as reported by the Federal Statistical Office. In May, the inflation rate fell to 6.1 percent. Economists had expected an increase to 6.3 percent for this month. From May to June, the cost of living increased by 0.3 percent.
“While inflation is of course still far too high, this increase should not be overstated,” said economist Salomon Fiedler of Berenberg Bank. “Because the main drivers in June were base effects due to the temporary government aid measures – in particular the 9-euro ticket, but also the fuel discount.” These two base effects will keep the annual rate of inflation high in July and August, explained Deutsche Bank economist Sebastian Becker. Without them, “inflation would probably have continued to fall this month.”
From June to August 2022, the federal government introduced a fuel rebate that made petrol and diesel cheaper because of the sharp rise in energy prices as a result of the Russian war against Ukraine. At the same time, a ticket for nine euros per month was introduced for 90 days in public transport.
On average, energy cost 3.0 percent more in June than a year earlier (May: 2.6 percent). Food prices rose again significantly by 13.7 percent, but not as much as in May with 14.9 percent. Services cost an average of 5.3 percent more than a year earlier (May: 4.5 percent).
Most analysts expect prices to ease in the second half of the year. The lower prices for gas and oil are “increasingly reflected in electricity prices,” said BayernLB chief economist Jürgen Michels. “We also expect food prices to fall more sharply over the summer.”
“The June figures only interrupt the downward trend in inflation, but do not yet mark the end of it,” said Commerzbank chief economist Joerg Kraemer. According to ING chief economist Carsten Brzeski, it is a 2″ temporary break”. After the summer, the decline in inflation should gain momentum.