As Deutschlandfunk reports, the Federal Statistical Office (Destatis) determined in an initial estimate that the inflation rate in Germany rose to 2.9 percent in April. This is the highest value in more than two years. According to the office, the main drivers of inflation are the prices for oil and gas.
According to the Wiesbaden-based authority, consumer prices rose by 2.9 percent compared to the same month last year. Compared to the previous month of March, they increased by 0.5 percent. The rate of 2.8 percent expected by economists was thus slightly exceeded.
Energy prices had a particularly strong impact. As the Federal Statistical Office reports, household energy and fuels became significantly more expensive year-on-year. Prices for light heating oil and fuels increased by double digits. Gas prices also rose sharply. Without considering energy prices, the inflation rate would have been lower, according to the statisticians.
The core inflation rate, which excludes volatile components such as energy and food, stood at 2.5 percent in April. This is evident from the data from the Federal Statistical Office. Food prices rose by 1.8 percent compared to the same month last year, thus somewhat weaker than overall inflation.
The rise in the inflation rate to 2.9 percent is the highest value since February 2022, when the rate stood at 3.1 percent. At that time, inflation had shot up as a result of Russia's war of aggression against Ukraine and the associated energy price shocks. In the following months, the inflation rate temporarily rose to over eight percent before declining again over the course of 2023.
The European Central Bank (ECB) aims for an inflation rate of two percent for the euro area in the medium term. The current data from Germany indicate that inflation remains above this target. Economists expect that the ECB will leave key interest rates unchanged for the time being at its next interest rate meeting.
The Federal Statistical Office points out that the April figures are an initial estimate. The final data are expected to be published in mid-May. The inflation rate is calculated based on consumer prices for goods and services that private households purchase in Germany.
According to experts, the price trend for energy remains a risk factor for further inflation development. If oil and gas prices remain at the current level or rise further, inflation could remain high in the coming months. The planned increase in the CO2 price at the turn of the year could also make energy prices more expensive.
The federal government has taken various measures to relieve citizens, including reducing the value-added tax on gas and district heating as well as the electricity price brake. Whether these measures are sufficient to sustainably curb inflation remains to be seen.
Source: www.deutschlandfunk.de
