German inflation recorded a slowdown but still sits above the central bank’s original target.
In the latest update, the country’s annual consumer price inflation eased to 2.1% in June. This is a sharp downgrade from the 2.4% result in May.
It is also in line with the average analyst consensus, which had given the same rating for the month.
On the other hand, this is still above the European Central Bank’s 2.0% target.
For the record, Europe’s biggest economy’s national consumer price index for the same period declined to 2.3%.
However, even this pullback could not take with it the overall picture, as big government spending during the pandemic comes into play.
Similarly, the country’s rehabilitation program, which needs additional cash on the line, will pose additional risk.
It is also worth noting that the recent data takes into account volatile components such as energy prices and food costs.
During the same period, the price of crude ballooned at a faster than expected rate due to the swift recovery of the global economy.
The fast vaccination progress among the world’s biggest economies continues to buoy the prices of fossil fuels.
Specifically, the United States has already managed to inoculate nearly half of its population. With this, its services, entertainment and leisure, and travel sectors have already made considerable recoveries.
This paves the way to higher demand for energy commodities and thus added weight to Germany’s non-core inflation rate.
According to the country’s economists, there has been an underlying price pressure lurking in the corner.
With this, the nation’s central bank lifted its inflation forecast to 2.6% for 2021. Should this happen, this will be the highest level since 2008.
European Union’s Green Development Thrust Going Smoothly
Meanwhile, the European Union’s green development initiative seems to be going smoother than expected.
In the latest update from a government agency, the bloc recorded a 12% decline from CO2 emissions from new cars sold in Europe in 2020.
This is due to the increased market appetite for electric vehicles. It quietly ascends to the top of consumer preference for automobile options.
In more detailed data, there were nearly 12 million new cars sold in the European Union, Great Britain, Norway, and Iceland in 2020.
Battery-powered and hybrid EVs now account for 11% of the result. This has ignited experts’ hope for a shift in consumer trends.
For the record, the supranational organization is bounded by the Paris Climate Agreement, targeting to keep global warming at below 1.5% from the pre-industrial threshold.