Germany’s inflation drops to 2.2 percent in March – the lowest status since November – Diepresse.com

The inflation rate fell in March in March due to cheaper energy and the poor economy in Germany. Goods and services only increased by an average of 2.2 percent compared to the previous year, as the Federal Statistical Office announced on Monday to its first estimate. This has been the lowest value since November 2024. In January and February, consumer prices had increased by 2.3 percent each.

Interested economists had expected this decline. From February to March, prices attracted 0.3 percent. « Germany’s inflation gradually approaches the price stability defined with two percent, » said economist Friedrich Heinemann from the Center for European Economic Research (ZEW) in Mannheim. In view of the high wage degrees, people’s purchasing power continue to go up, which should support consumption. « In addition to the falling gasoline prices, the reason for this is also the bad economy, » Heinemann explained the declining inflation. The difficult situation of many companies press prices.

Commerzbank chief economist Jörg Krämer sees it the same way. « The decline in inflation is primarily due to the fact that the prices for services no longer rise as quickly, » said Jörg Krämer. « The weak economy makes it difficult for companies to pass the rapid wages to consumers. » At best, many experts trust Europe’s largest economy to grow slightly after it has shrunk both in 2023 and 2024.

Food prices are increasing more

Price drivers remained the food in March. These cost an average of 2.9 percent more than a year earlier (February: plus 2.4 percent). In contrast, energy was reduced by 2.8 percent (February: minus 1.6 percent). Services cost 3.4 percent more (February: plus 3.8 percent). The inflation rate without food and energy, often also referred to as core inflation, fell to 2.5 (February: 2.7) percent. The inflation goal of the European Central Bank (ECB) for the currency area is two percent. The German inflation rate calculated according to European standards is currently still above this target brand at 2.3 percent. « In the coming months, inflation should continue to decrease without the strongly fluctuating prices for energy and food – also in the euro area, » says Commerzbank chief economist Krämer. « The ECB will probably reduce its interest at the meeting in mid -April. »

According to the IFO Institute, the German inflation rate will be a good two percent in the coming months. This prediction is based on a new survey among companies for their price expectations. The barometer calculated from it fell slightly to 18.7 points in March, after 19.3 points in February, as the Munich Institute announced. On the whole, this early indicator for price development in Germany continues its sideways movement that has been on sideways for almost two years. « The inflation rate is therefore likely to be a little more than two percent in the coming months, » said IFO economy head Timo Wollmerhäuser. (APA/Reuters)