Food is becoming cheaper for the first time in a long time. Energy also costs less in March than a year earlier.
Falling food and energy prices pushed inflation in Germany to its lowest level in around three years in March. According to the Federal Statistical Office, consumer prices in March were 2.2 percent higher than in the same month last year. The authority confirmed preliminary data on Friday. The rate was as low as it was last in May 2021, which was also 2.2 percent. The value was previously lower in April 2021 at 2.0 percent. In February of the current year the inflation rate was 2.5 percent and in January it was 2.9 percent.
“The price situation for energy and food dampened the inflation rate for the second month in a row. In March 2024, food was cheaper for consumers for the first time since February 2015 than a year earlier,” explained head of the authority Ruth Brand. Consumers paid 0.7 percent less for food than a year earlier.
Despite the energy price brakes that expired at the beginning of the year and the increase in the CO2 price to 45 euros per ton of carbon dioxide (CO2), energy prices fell by 2.7 percent in March compared to the same month last year. Natural gas (minus 9.2 percent) and electricity (minus 8.1 percent) were cheaper, among other things. District heating, on the other hand, costs 20.6 percent more. Services rose in price by 3.7 percent.
Economists expect a further decline in inflation. On an annual average, leading economic research institutes expect inflation to weaken significantly to 2.3 percent after 5.9 percent last year. Higher inflation rates reduce the purchasing power of consumers. People can afford one euro less. Last year, many consumers therefore turned the red pencil. Private consumption failed to provide an important economic support. Compared to the previous month of February, consumer prices rose by 0.4 percent.
Source: Stern
