2023-10-11 13:43:14
The inflation rate in Germany is falling to its lowest level in 18 months. However, significantly increased food prices continue to cause problems for people.
Wiesbaden.
Despite a significant decline in September, inflation remains a burden for people in Germany. According to the Federal Statistical Office, consumer prices in September were 4.5 percent higher than in the same month last year. The authority confirmed an initial estimate on Wednesday.
“The inflation rate has fallen to its lowest level since the start of the war in Ukraine. But it remains high,” said the authorities’ president, Ruth Brand. In August the inflation rate was still 6.1 percent.
Economists expect a further weakening by the end of the year. However, above-average increases in food prices continue to burden consumers.
The last time there was a four to the decimal point in the annual inflation rate was in February last year when it was 4.3 percent. After the start of the war in Ukraine, energy prices rose rapidly and fueled inflation overall.
Relaxation in energy prices
Energy prices have now eased. They rose by 1.0 percent in September compared to the same month last year. Natural gas (minus 5.3 percent) and fuel (minus 6.0 percent) became cheaper. Light heating oil even cost 26.0 percent less than a year earlier. Electricity, however, rose in price by 11.1 percent.
Significantly more than a year ago, people had to pay for food in September, which rose in price by 7.5 percent. However, price inflation weakened after 9 percent in August and 11 percent in July. In September, sugar, jam, honey and other confectionery (plus 15.3 percent) as well as bread (plus 12.0 percent) were significantly more expensive than in the same month last year.
Significantly increased prices are a burden for consumers. People can afford less for their money. According to their own statements, around one in six Germans can hardly afford their living costs due to high inflation. 17.2 percent of 2,059 respondents in a YouGov survey for Postbank chose this answer option when asked how they perceived the price increases.
Further weakening of inflation expected
Compared to the previous month of August, consumer prices rose by 0.3 percent in September. According to economists, inflation is likely to continue to weaken by the end of the year. Leading research institutes expect the inflation rate to fall to 2.6 percent in the coming year after the expected average of 6.1 percent for the current year.
The European Central Bank (ECB) has so far counteracted increased inflation in the euro area and Germany with ten interest rate increases in a row. Higher interest rates make loans more expensive, which can slow down demand and counteract high inflation rates. The monetary authorities see their goal of stable prices with inflation of 2.0 percent in the euro area in the medium term.
Consumer advice centers are calling for “price peaks”
In September of the current year, the so-called Harmonized Consumer Price Index (HICP), which the ECB uses for its monetary policy, was 4.3 percent in Europe’s largest economy, Germany.
Meanwhile, consumer advice centers are demanding clarification about the persistently higher price increases for food in supermarkets. The development has decoupled from general inflation and also from energy prices, said the head of the Federal Association (vzbv), Ramona Pop, in Berlin. “The pricing is extremely non-transparent.” Customers have been struggling with sharply rising prices for months and feel let down by constant increases. The federal government must act and convene a “price summit” with all important players. (dpa)
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