Strongly fluctuating inflation expected: Bundesbank predicts ups and downs in the inflation rate

Strongly fluctuating inflation expected: Bundesbank predicts ups and downs in the inflation rate

The Bundesbank expects that consumers in Germany will be confronted with highly fluctuating inflation in the next few months. In April, the inflation rate is expected to temporarily decline compared to last year due to the early Easter date. This will be due in particular to the lack of a significant price increase for travel services. In May, however, the rate could increase again to around 3 percent, as the introduction of the Germany ticket in the previous year had dampened the price level.

In addition to these statistical base effects, the inflation rate is expected to be driven by increased oil prices and continued strong wage growth. In March, the German inflation rate was 2.3 percent, just above the European Central Bank (ECB)'s target level of two percent for the entire euro area. The Bundesbank's forecast suggests that there will be ups and downs in inflation in the near future, coinciding with a possible interest rate cut by the ECB.

The Deutsche Bundesbank reports that despite some positive signals, the German economy does not yet indicate a lasting upswing. Although there are signs of slight improvement, a sustained recovery remains uncertain. Industrial production has increased in some areas, supported by increased exports of goods. However, adverse factors such as increased financing costs and political uncertainty will continue to influence companies' investment activity. Although the mood of companies has improved, private households are showing restraint in their consumer spending despite rising wages and falling inflation rates.