Energy prices declined both year-on-year and month-on-month in June. Across all customer groups, electricity prices were 12.4 percent lower than a year ago. Light heating oil cost 42.4 percent less in June than a year earlier.
Last year, energy prices were the main driver of inflation in Europe's largest economy.
Destatis reported large year-on-year increases in the prices of non-durable consumer goods due to rising food prices. Food products were 11.1 percent more expensive at the factory gate than a year earlier.
Producer prices of processed potatoes rose 35.9 percent year-on-year, and sugar prices almost doubled. According to Destatis, only a few products, such as butter and crude vegetable oils, were cheaper in June 2023 than in June 2022.
Driven by rising food prices, inflation in Germany rose again to 6.4 percent in June, according to official figures.
In the coming months, inflation is expected to decrease again, but will still remain high. "Supply-side price drivers, for example, supply chain disruptions or the pass-through of past cost increases, are continuing to ease, while at the same time, monetary tightening is dampening demand," the Ministry for Economic Affairs and Climate Action said in its monthly economic report last Friday.
The Kiel Institute for the World Economy (IfW Kiel) said it expected inflation to ease to 5.8 percent in the current year, before dropping to 2.1 percent in 2024.
"The purchasing power of many people is already increasing noticeably in the further course of the year thanks to strong wage growth and higher social benefits combined with lower inflation. This is giving a boost to private consumption, which has recently been very weak," IfW Kiel said in its forecast published in mid-June.
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