BERLIN, July 1 (Xinhua) -- Price pressure in Germany has eased again after a brief uptick, with the inflation rate dropping to 2.2 percent in June, according to preliminary data from the Federal Statistical Office (Destatis) on Monday.
The slowdown was mainly driven by a decline in energy prices, which fell by 2.1 percent year-on-year. Food prices rose by 1.1 percent, while services experienced a sharper increase of 3.9 percent, higher than the overall inflation rate.
As fewer German companies reportedly plan to raise prices, particularly in industry and consumer-related sectors, the ifo Institute for Economic Research expects inflation to continue falling in the coming months, predicting that the rate will dip below 2 percent in August for the first time in over three years.
Following years of high price levels and rising interest rates, the European Central Bank (ECB) cut its key interest rates by 25 basis points last month. Further cuts have been ruled out for the time being.
Despite significant progress, Europe's fight against inflation is not over, ECB President Christine Lagarde said recently on social media platform X. "We still need to keep our foot on the brake for a while, even if we are not pressing down as hard as before," she added.
Employees in the European Union (EU) continued to lose purchasing power last year. Despite stronger nominal wage growth and easing inflation, real wages fell by 0.6 percent on average, following a decline of 4.2 percent in 2022, the Institute of Economic and Social Research (WSI) reported on Monday.
The WSI forecasts a slow recovery in consumer purchasing power this year and expects real gross wages to increase 2 percent on average in the EU. However, it added, this does not mean the crisis is over, as the losses of previous years are "far from being offset."
