Germany saw inflation weaken further in March to the lowest level in almost three years, bringing down food and energy prices compared to a year earlier.
Consumer prices were 2.2% higher than in the same month last year, Germany’s Federal Statistical Office, Destatis, said on Friday, confirming preliminary figures.
The last time the inflation rate was lower was in April 2021, at 2.0%. In February the inflation rate stood at 2.5% and in January at 2.9%.
“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 than a year earlier for the first time since February 2015,” said Ruth Brand, head of the statistics agency.
Consumers paid 0.7% less for food than a year earlier. According to the figures, this was the first time since February 2015 that food prices had declined year-on-year. Services, on the other hand, increased in price by 3.7%.
Despite the expiry of the energy price brake at the beginning of the year and the increase in the carbon price to €45 ($48) per ton of carbon dioxide (CO2), energy became 2.7% cheaper in March, according to the data.
Leading economic research institutes expect inflation to slow significantly to 2.3% on average for the year, down from 5.9% last year.
Higher inflation rates reduce the purchasing power of consumers. Many consumers therefore cut back last year. Private consumption, an important pillar of the economy, shrunk.
According to the latest data, consumer prices rose by 0.4% in March compared to February.
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