Deflation threat fades as prices rise by tiny degree

German consumer prices rose by a meagre 0.1 percent in June compared with the same month in 2008, but a threat of deflation appeared to be easing, provisional official figures released on Friday showed.

Deflation threat fades as prices rise by tiny degree
Photo: DPA

The result was in line with a forecast of analysts polled by Dow Jones Newswires for Europe’s biggest economy.

On a monthly basis, German inflation came in at 0.4 percent, higher than the analyst’s forecast for no change.

That was mainly as a result of marked increases in the cost of heating oil and motor fuels, the national statistics office Destatis said.

Final figures are expected on July 9.

In May, inflation in Germany and the 16-nation euro-zone in general was zero, as the bloc flirted with deflation, a generalised decrease in prices that can undermine investment, production and jobs.

The European Central Bank does not consider such a possibility to be a serious threat.

Prices have plunged mainly because of a sharp drop late last year in the cost of crude oil, which spiked in July 2008 to all-time highs, and which has begun to climb again.

Destatis said that motor fuels gained between 3.9 and 5.1 percent in June from May, while heating oil was up by between 5.1 and 8.6 percent.

“After already moderate monthly rises in the energy price component of the consumer price index in the previous two months, gasoline and heating oil prices were up strongly in June,” UniCredit economist Alexander Koch noted.

Food prices also rose, for the first time since January on a monthly basis, gaining between 0.1 and 0.5 percent, Destatis said.

“The strong disinflation process in consumer prices since mid last year is levelling off,” Koch commented.

“Depending mainly on the volatility in the oil price we expect a fluctuation around the zero mark in the short term,” he said.

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Germans produce more packaging waste than ever before

Per capita, Germans throw 226.5 kilograms of packaging away each year - a record high. A new report looks at the reasons behind the rise.

Germans produce more packaging waste than ever before
Rubbish bags hanging on a street in Berlin. Photo: DPA

The volume of packaging waste in Germany rose to a record high in 2017.

According to a new report by the Federal Environment Agency (Das Umweltbundesamt, or UBA), 18.7 million tonnes were generated that year – 226.5 kilograms per person, an increase of three percent over the previous year.

READ ALSO: Germany accumulates more packaging waste per capita than any country in the EU

Private consumers constituted 47 percent of the waste, or 107 kilograms per capita. 

The UBA report, titled “The emergence and recycling of packaging in Germany” was published at the start of the “European Week for Waste Avoidance” on November 16th.  

Graph prepared for The Local by Statista

The paper cited the growing popularity of online shopping and increasingly convenient take-away dining as the main culprits behind the increase in waste. 

Take-out aficionados are also more inclined to purchase small portions, leading to more packaging consumption, it added.

“We consume far too much packaging,” said UBA President Maria Krautzberger. “This is bad for the environment and for the consumption of raw materials. Waste should be avoided as early as possible in the production phase.”

“Unnecessary and unnecessarily material-intensive packaging should therefore be avoided,” she said.

Much more reusable packaging is needed, added Krautzberger, and not just for mineral water and beer. 

“You can also take your coffee with you in returnable cups, and those who take their food with them should also be able to do so in returnable containers,” Krautzberger said.

Germany has already proposed several plans to cut pack on packaging waste.

In May this year, the UBA proposed surcharges of about 20 cents per take-away coffee cup and 10 cents per lid to make disposable cups more expensive than reusable alternatives.

READ ALSO: Why your takeaway coffee could soon cost more in Germany

Smaller programs have also began turning waste into fuel, at a rate of up to 250 kilograms per day. Other initiatives are aimed at improving Germany's recycling system, as reportedly up to 60 percent of plastic waste ends up in the wrong bin.

Germany still recycles a lot of waste, or just under 70 percent, the UBA stated in its report.

Steel is recycled at 92.2 percent, paper and cardboard at 87.6 percent and glass at 84.4 percent. Plastic packaging waste is recycled at 49.7 percent, and wood at 25.8 percent.

The figures for the amount of packaging waste in 2018 will not be published until next year.

READ ALSO: Germany wastes 1.7 million tons of bread per year