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Germany's Inflation Rate Hits 2.2% in June 2024
Latest Data Shows a Slight Decline from Previous Month
CPI Measures Year-on-Year Change in Consumer Prices
Germany's annual inflation rate fell to 2.2% in June 2024, down from 2.4% in May, according to preliminary data released by the Federal Statistical Office. This is below forecasts of 2.3%. The inflation rate is measured as the year-on-year change in the consumer price index (CPI), which tracks the prices of a basket of goods and services purchased by households. The decline in the inflation rate is attributed to lower energy prices, which have been falling in recent months. However, food prices have been rising, offsetting some of the decline in energy prices. The overall impact has been a slight decrease in the headline inflation rate. Despite the recent decline, the inflation rate remains above the European Central Bank's target of 2%. The ECB has been raising interest rates in an effort to bring inflation back down to its target. However, it is expected to take some time for these measures to have an impact. The high inflation rate is a concern for policymakers, as it can erode the purchasing power of consumers and businesses. It can also lead to higher interest rates, which can slow economic growth. The government is expected to take steps to address the inflation rate, such as increasing the supply of affordable housing and reducing the cost of energy. ```
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