German Inflation Falls Unexpectedly to 2.0 Percent in June

Inflation in Germany unexpectedly fell to 2.0 percent in June, according to the German statistics office Destatis. This can be compared to 2.1 percent in May. Analysts had on average expected an increase to 2.2 percent in June, according to a compilation of forecasts made by Bloomberg.

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German Inflation Falls Unexpectedly to 2.0 Percent in June
Photo: Michael Probst AP/TT

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The German inflation figures come after Italian statistics showed that inflation in Italy in June was unchanged at 1.7 percent. This was slightly lower than the expected 1.8 percent.

Last week, two other major euro countries - France and Spain - reported slightly higher inflation than before. In France, inflation rose to 0.8 percent in June, up from the four-year low of 0.6 percent in May. In Spain, inflation rose to 2.2 percent in June.

Preliminary Swedish inflation figures for June are expected on Monday, July 7.

The inflation target in both the euro zone and Sweden is 2.0 percent.

If inflationary pressure exceeds the target, it may justify raised interest rates from the European Central Bank (ECB) and the Swedish Central Bank - to dampen demand and cool down the economy. But if inflation appears to fall below the target, it may justify interest rate cuts to stimulate lending and thus increased economic activity.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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