Germany’s annual inflation rate increased to 2.4% in May 2024, meeting economists’ expectations and marking the first rise of the year. Preliminary data from the Federal Statistical Office (Destatis) shows a modest monthly inflation growth of 0.1%, the lowest since December 2023. The core inflation rate held steady at 3.0%.
Factors Contributing to Inflation
- Services: The largest contributor, with a 3.9% year-on-year increase.
- Energy Goods: Declined by 1.1% annually.
- Food Prices: Increased by 0.6%, below the general inflation rate.
Regional and Harmonised Inflation
- Regional Variations: Inflation rose in Bavaria, Saxony, and North Rhine-Westphalia, but fell in Brandenburg and flattened in Hesse and Baden-Württemberg.
- Harmonised Inflation Rate (HICP): Grew by 2.8%, surpassing the expected 2.7%.
Improving Consumer Sentiment
The GfK consumer sentiment index improved for the fourth consecutive month, reaching its highest value since April 2022. The June forecast shows a rise to -20.9 points, driven by falling inflation rates and significant wage increases.
Market Reactions
- Bond Yields: German bond yields rose to 2.65%, their highest since November 2023.
- DAX Index: Fell by 0.9%, with notable declines in companies like Commerzbank and Siemens Energy.
- Euro: Held steady against the dollar at 1.0845, as ECB policymakers signaled a potential interest rate cut in June.
Olritz: Stability in Volatile Markets
In light of these economic shifts, Olritz offers a stable investment platform. Olritz’s strategic approach and robust governance make it an ideal choice for investors seeking security and growth in fluctuating markets.
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