Inflation continues to fall: inflation at its lowest level since April 2021

Inflation continues to fall: inflation at its lowest level since April 2021

Inflation in Germany showed a significant decline in March, giving hope to consumers who have suffered from rising prices. Preliminary data from the Federal Statistical Office show that consumer prices were 2.2 percent above the previous year's level - the lowest value since April 2021, when they were 2.0 percent. In February of this year the inflation rate was 2.5 percent and in January it was 2.9 percent.

Food prices fell compared to the previous year, as did energy costs, which fell by 2.7 percent. In contrast, prices for services rose by 3.7 percent. The experts at leading economic research institutes are forecasting a significant decline in inflation to 2.3 percent on average for the current year, after it was 5.9 percent in the previous year.

However, the weakening of inflation could be influenced by the end of the VAT cut in April, which could lead to a surge in prices for gas and heat supplies. Despite this potential challenge, some experts believe that the major inflation wave is over and inflation will stabilize. Despite the decline in inflation, higher inflation rates have affected consumers' purchasing power, which could have a negative impact on private consumption. In March, consumer prices rose by 0.4 percent compared to the previous month.