Inflation in Germany fell to 4.5 percent in September – good news for consumers

Inflation in Germany fell to 4.5 percent in September – good news for consumers

According to a report by amp.focus.de, inflation in Germany fell significantly in September. After months of high inflation rates, the inflation rate fell to 4.5 percent compared to the previous year. What is particularly encouraging is that inflation has actually fallen more sharply for low-income households. Food prices rose by 7.7 percent in September, followed by alcohol and tobacco at 8.8 percent. However, the President of the Federal Statistical Office, Ruth Brand, emphasizes that the increased food prices are still noticeable.

According to a study by the Institute for Macroeconomics and Business Cycle Research (IMK), inflation places less of a burden on low-income households than other households. Food and household energy became significantly more expensive, particularly during the worst phase of inflation. For households with lower incomes, whose share of expenditure on food and household energy is particularly high, individual inflation was sometimes 3.1 percentage points above the general inflation rate. This difference has now narrowed to just 0.4 percentage points.

The study also shows that low-income couples with two children are currently experiencing the lowest inflation, while couples with medium net incomes have the highest inflation rate. Economists expect prices to stabilize and core inflation, which does not take into account volatile goods such as food or energy, to continue to decline.

However, risks remain, particularly in the area of ​​food prices. There is high price pressure on grain and wheat, which may lead to possible price increases. The IMK economists also see the risk of excessive monetary tightening by the European Central Bank (ECB), which could further slow down the weak economy. A prolonged economic downturn would not only impair the transformation process with regard to climate protection, but would also make low-income households more severely affected.

Overall, low-income households can be happy about their individually weaker inflation rate, but the price crisis has not yet been completely overcome. There is still a need to be cautious and closely monitor developments in the market.

Source: According to a report from amp.focus.de, [link to article]