In what could be seen as a temporary relief, Germany's headline inflation eased sharply at the end of 2022, thanks to lower energy prices and the government's efforts to share the energy bill burden of the people. However, economists said the biggest euro area economy is set to reel under the pressures of high inflation for a long time, which in turn is set to keep the European Central Bank on its toes as policymakers continue with interest rate hikes. Consumer price inflation slowed at a faster than expected pace in December as the rate of increase in energy prices slowed sharply after the government took relief measures, preliminary data from Germany's statistical office Destatis showed Tuesday.
The consumer price index rose 8.6 percent year-on-year following a 10.0 percent rise in November. Economists had expected headline inflation to slow to 9.1 percent. Energy inflation sharply eased to 24.4 percent from 38.7 percent in the previous month. The federal one-off payment in December to cover the monthly installment for gas and heat had a downward effect on prices, Destatis said. Germans had witnessed energy and food prices surge since the start of the war in Ukraine. Commerzbank estimated that the damping effect of the government support on energy prices would have lowered the inflation rate in December by around 1.2 percentage points.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.