Tags: Germany | Price | Inflation | energy

Germany Sees Price Inflation Spreading From Energy

Monday, 20 Jun 2011 10:28 AM

Germany is increasingly concerned high energy prices will spill over into price rises the wider economy, a monthly report from the finance ministry showed on Monday.

"It is clear that price increases upstream should shift gradually onto consumer prices of other products beyond fuel," the ministry said in its report, adding: "more and more consumers assume this." German inflation slowed slightly in May for the first time in nine months, but has not been slightly under 2 percent — the European Central Bank's target rate for the broader euro zone — since December.

The ECB raised interest rates for the first time earlier this year and is widely expected to up rates by another 25 basis points to 1.50 percent in July.

Germany has staged a strong recovery from its deepest postwar recession, and data shows growth continues to broaden with the manufacturing sector buoyant and domestic demand rising as unemployment declines.

Finance Minister Wolfgang Schaeuble said last week he saw a certain upward trend of prices in Germany, did not consider it a danger and underlined his trust in the ECB to ensure price stability.

German tax coffers saw a surge of revenue in May, the monthly report showed, with the tax take rising 10.1 percent compared to the same period a year earlier.

The finance ministry also said it expected growth figures for the second quarter to show growth slowing from the first.

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Germany is increasingly concerned high energy prices will spill over into price rises the wider economy, a monthly report from the finance ministry showed on Monday. It is clear that price increases upstream should shift gradually onto consumer prices of other products...
Germany,Price,Inflation,energy
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2011-28-20
 

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