For the first time since last August, the inflation rate in March was below the eight percent mark. However, the development does not mean any relief for consumers.
Falling gasoline and heating oil prices significantly depressed inflation in Germany. Goods and services cost an average of 7.4% more in March than a year earlier, the Federal Statistical Office announced Thursday in an initial estimate. In January and February, inflation was still 8.7%. Compared with the previous month, consumer prices rose by 0.8% in March.
For the first time since last August, the inflation rate in March was below the eight percent mark. At that time, 7 percent had been measured.
No relief for consumers
However, the development does not mean any relief for consumers. Prices are compared with the level of the same month of the previous year. In March last year, consumer prices rose 5.9%. Compared to that, the current increase is even greater.
The rise in energy prices, which soared in March 2022 after the start of the Russian war of aggression in Ukraine, slowed down significantly by another 3.5% (February 2023: +19.1). The government price brakes for gas and electricity, which will apply retrospectively from March 1, 2023 to January 1, 2023, are also expected to have a dampening effect. Food prices, on the other hand, rose at an above average rate of 22.3%.
Peak in Germany must have passed
For a long time, inflation was mainly driven by high energy and food prices. Meanwhile, price increases are affecting more and more parts of everyday life. Higher inflation rates reduce consumers’ purchasing power because they may pay less for a euro.
Economists say inflation in Europe’s biggest economy may have peaked. However, they don’t expect a full reduction in prices in the current year. The federal government assumes an average annual inflation rate of 6.0%. According to revised Federal Office data, consumer prices in Germany rose by an average of 6.9% last year.
(APA)