Inflation in Germany sinks to lowest level since August 2022
The falling cost of energy and petrol means that inflation in Germany is gradually sinking. The most recent analysis shows inflation to be at its lowest rate since the summer of 2022 and experts are predicting the trend will continue throughout the year.
Inflation rate falls to 7,2 percent in Germany
Germany’s Federal Statistical Office (Destatis) has announced that inflation in the federal republic is at its lowest level since August 2022. At the end of March 2023, goods and services cost 7,2 percent more than during the same period of the previous year.
The past few years have seen German inflation rates break historic records time and time again. In 2021, inflation rose above 4 percent for the first time since 1993. Putin’s invasion of Ukraine accelerated the trend, with Germany hitting 10 percent inflation in September 2022, the highest rate since 1951. In January and February this year, rates lay at 8,7 percent.
Now experts are predicting that rates will continue to ease over 2023. The German Economic Research Institute is suggesting an average rate of between 6,0 and 6,9 percent for 2023. For 2024, a rate of 2,4 percent has been forecast.
Food shopping is still hitting Germans the hardest
According to Ruth Brand, President of Destatis, buying the weekly shop is still the cost burning the biggest hole in Germans’ pockets. “For private households, the renewed increase in food prices was particularly significant in March,” Brand told die Zeit. During February 2023, the cost of food increased by an average of 21,8 percent compared to the same period in 2022, and during March by an average of 22,3 percent.
When it comes to energy prices in March of this year compared to last year, the price rise is only 3,5 percent, much less compared to the jump of 19 percent between February 2022 and 2023. This discrepancy can be explained by the fact that in March 2022 energy prices had already sharply risen after Russia’s invasion. The German government’s gas price cap, which came in on March 1 and was retroactively applied to utility bills for January and February, also helped to lower the inflation rate.
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