Inflation in Germany fell to 7.4% in March
Inflation in Germany fell by a large margin this March to 7.4% at an annual rate in light of the relative stability in energy prices as a result of measures taken by the government, according to official figures released Thursday.
The “Distatis” Institute for Statistics stated in a statement that the price rise continues to slow since the peak recorded last fall, which amounted to 8.8% at an annual rate, according to a new approach to calculating price development.
The Harmonized Price Index, a benchmark for the European Central Bank, increased by 7.8% in March, an annual pace, compared to 9.3% in February.
The price increase is at a monthly rate of 0.8%, according to uncoordinated data, according to “Agence France Presse”.
The Disstates Institute pointed out that since the start of the Russian invasion of Ukraine in February 2022, energy and food prices have recorded a “significant increase and had a significant impact on the inflation rate.”
Food prices continued to rise in March at a rate of 22.3% compared to the same month last year.
As for the rise in energy prices, which reached its peak in March 2022 in the wake of the invasion of Ukraine, it witnessed a significant slowdown, recording 3.5%, after 19.1% in February.
A factor contributing to this decline was the government’s measures to curb rising gas and electricity prices, which were at the heart of a 200 billion euro plan approved by Berlin last year.
As part of the decline in inflation in the eurozone, the rate slowed in Spain to 3.3% in March at an annual rate, compared to 6% in February, as a result of the decline in electricity and fuel prices, according to provisional estimates published Thursday.
France will issue its estimates on Friday, with inflation expected to decline to 5.5% at an annual rate, according to analysts polled by the FactSet Institute, before Eurostat also publishes its index for the eurozone, and this data remains below the target set by the European Central Bank by 2%.
The head of the economics department at the bank, Philip Lane, said Wednesday in an interview with the weekly newspaper “Die Zeit” that the euro area is going through “probably a stage of maximum inflation, but he expected a rapid decline in inflation at the end of the year.”
For Germany, LBBW economist Jens-Olivier Niklasch said he hoped inflation would fall below 4% “by the end of the year”.
In its battle to stabilize prices, the ECB has raised its base interest rate by 3.5% since July and is not planning to stop there despite the recent turmoil in the banking sector.