Inflation rate falls significantly in March - food prices continue to rise particularly sharply

Inflation in Germany rose by 7.4 percent in March.

That was the lowest increase since August.

Munich - The prices for goods and services rose by 7.4 percent in March compared to the previous year.

This was announced by the Federal Statistical Office on Thursday in a first estimate.

The economists at the largest German banks had previously expected an average increase of 7.3 percent.

This further weakens the price pressure in Germany.

In February, the inflation rate was still 8.7 percent.

Above all, the increase in energy prices lost significant momentum at 3.5 percent.

They jumped in March 2022 because of the Russian invasion of Ukraine.

The government price controls for gas and electricity are also likely to have contributed to the subdued increase.

They apply from March 1, retrospectively to January 1, 2023. In contrast, the prices for food once again increased at an above-average rate of 22.3 percent.

Inflation: Economists expect high price pressure to continue over the course of the year

According to economists, inflation in Europe's largest economy may have peaked by now.

However, inflation is likely to remain at a high level in the current year.

For example, the economists are assuming an average inflation rate of 6.6 percent for the current year.

In their most recent spring forecast, the experts warned that high inflation “continues to be a major burden for the economy”.

Higher inflation rates reduce the purchasing power of consumers because they can then afford less for one euro.