The inflation rate in Germany has pressed cheaper energy to the lowest value since October. Consumers: In April, internal prices were 2.1 percent above the level of the previous year, as the Federal Statistical Office in Wiesbaden announced on the basis of preliminary figures. In March, the inflation was still 2.2 percent.
Energy was particularly cheaper: here the prices in April were 5.4 percent below the level of the previous year. The oil price has dropped greatly as a result of the customs dispute and worries about the global economy, which consumers feel when refueling.
Food, on the other hand, again increased by 2.8 percent above average, although the price pressure decreased somewhat. The prices for services, including visits to the restaurant and car repairs, even increased by 3.9 percent. “The numbers will not be happy with consumers,” says Michael Heise, chief economist at the asset manager HQ Trust in Bad Homburg.
“Life does not get cheaper, but less expensive”
“The inflation rate continues and pulls itself backwards towards the symbolically important 2 percent mark,” analyzes Deutsche-Bank-Volkswirt Sebastian Becker. “This is a good news for the consumers, although this unfortunately does not make life cheaper, but only less expensive.”
The prices for food and services had already increased in March, while refueling and heating became cheaper. From March to April of the current year, consumer prices attracted a total of 0.4 percent.
Inflation flakes, but prices remain high
The wave of inflation is broken, but consumers: inside here feel the increased prices in everyday life. After the Russian raid on Ukraine 2022, inflation in Germany was shot up, energy and food were rapidly more expensive.
In 2022, inflation was an average of 6.9 percent and in 2023 5.9 percent. In the year 2024, the inflation rate then dismissed to 2.2 percent. Higher inflation rates reduce people’s purchasing power because they can then afford less for one euro.
Economist: Inside, rates expect over two percent
How the inflation continues has become more uncertain with the aggressive customs policy of US President Donald Trump. In this way, tariffs could hit the prices of industrial goods. Deutsche-Bank economy Becker expects the inflation rate to remain between 2.0 and 2.5 percent in the coming months.
The planned billions for defense and infrastructure could also influence inflation in Germany. Some economists expect the inflation to increase from higher economic demand.
On the other hand, in times of weak economy, companies can no longer easily pass on price increases to customers. In addition, the comparatively strong euro, which has significantly upgraded the US dollar, tends to import imports to Germany.
How does the European Central Bank act?
However, the inflation rate without the prices for energy and food that is prone to fluctuation rose to 2.9 percent in April – after 2.6 percent in March. This core inflation represents basic inflation and, in the opinion of many economists, represents the inflation trend better than the overall rate.
With concerns about the economy in the customs dispute, the European Central Bank (ECB) could still reduce interest rates again, economists believe. The central bank reduced the deposit rate relevant to savers and banks in mid -April for the seventh time since last summer: to 2.25 percent. At the next ECB interest decision in June there could be another step downwards. For savers, the further falling interest would mean.