Inflation in Germany Rises to 2.2%

Inflation in Germany rose in November, exceeding the European Central Bank's targets. However, this will not prevent policymakers from cutting interest rates in December. Inflation is expected to follow a volatile path.

According to data released by the German statistical office Destatis, consumer prices increased by 2.2% in November compared to the same period last year. This rate was recorded at 2% in October. Analysts had anticipated a rise of 2.3%. On a monthly basis, prices decreased by 0.2%.

Influence of energy prices and economic growth: The Eurozone harmonized inflation indicator saw a monthly decline of 0.7% in November, while an annual increase of 2.6% was expected, yet it registered a rise of 2.4%. This situation is attributed to the increase in energy prices.

However, rising unemployment and a slowdown in wages, combined with Germany's weakening economic growth, are expected to cool inflation in the coming months. These developments may represent an important turning point for policymakers who have long been concerned about inflationary pressures.

Service prices and core inflation: Service prices, seen as a symbol of inflationary pressures, remained stable at around 4% in November. Excluding volatile prices like energy and food, core inflation increased from 2.9% to 3.0%.

These figures highlight once again that inflation is a significant issue that needs to be monitored in Germany. Notably, the stability of prices in the services sector seems likely to influence future policy decisions, potentially complicating efforts to stimulate economic growth.