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ECONOMY

Price growth slows as German inflation tumbles

Inflation in Europe's largest economy Germany fell back sharply in May, official data showed, returning to sluggish levels after a spike related to the Easter holiday.

Price growth slows as German inflation tumbles
A file photo of Deutsche Bank headquarters in Frankfurt. Photo: DPA

Price growth stood at 1.4 percent year-on-year, federal statistics authority Destatis said in preliminary figures, some 0.6 percentage points lower than in April.

Most of the items like food, energy and goods that feed into the inflation index saw relatively stable price growth compared with last month.

But services inflation plummeted, from 2.1 percent in April to just 1.2 percent in May.

Analysts had last month noted that higher April inflation was mostly due to a late Easter pushing up prices for package holidays.

Price growth data for individual states like Hesse and Bavaria showed a massive slump in prices for all-inclusive trips this month.

April's 2.0-percent inflation reading had marked a rare moment of inflation being bang on the European Central Bank's target for industrial powerhouse Germany.

Despite years of ultra-low interest rates and 2.6 trillion in stimulus, the Frankfurt institution has struggled to meet its price stability target of inflation close to, but below 2.0 percent across the 19-nation eurozone.

Price growth was just 1.3 percent in Germany in May when measured using the Harmonised Index of Consumer Prices, the ECB's preferred yardstick.

READ ALSO: Germany under increasing pressure to boost spending

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MONEY

Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.

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