Inflation in Germany is losing some speed

Inflation in Germany remains at a high level despite a slowdown in March. Consumer prices rose by 7.4 percent compared to March 2022, the Federal Bureau of Statistics announced on Thursday based on initial calculations.

In February, an annual inflation rate of 8.7 percent was recorded. Inflation fell below eight percent in March for the first time since last August. At that time, 7 percent had been measured.

However, the development does not mean any relief for consumers. The prices are compared to the level of the same month of the previous year. In March last year, consumer prices rose by 5.9 percent. On the other hand, the current increase is even higher.

Energy prices have fallen again

The rise in energy prices, which had soared in March 2022 after the outbreak of the Russian war of aggression in Ukraine, slowed down significantly by plus 3.5 percent (February 2023: plus 19.1).

The government’s price brakes for gas and electricity, which apply from 1 March with retroactive effect to 1 January 2023, should also have a dampening effect. Food prices, on the other hand, rose above average at 22.3 percent.

For a long time, inflation was mainly driven by high energy and food prices. Meanwhile, price increases are affecting more and more areas of daily life. Higher inflation rates reduce consumers’ purchasing power because they can then afford one euro less.

Consumer prices rose by 0.8 percent in March compared to a month earlier.

peak probably passed

Economists say inflation in Europe’s largest economy is likely to have peaked. However, they do not expect a thorough price reduction in the current year.

The federal government assumes an annual inflation rate of 6.0 percent. According to revised data from the Federal Bureau, consumer prices in Germany rose by an average of 6.9 percent last year. (aeg/sda/awp/dpa)