As of: January 31, 2024, 2:23 p.m
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Cash is used to shop at a market stall: food prices rose by 3.8 percent.
© Sina Schuldt/dpa
The increase in food prices slowed down at the beginning of the year.
Energy even costs less than a year ago.
Inflation is on the decline.
Wiesbaden - Inflation in Germany slowed significantly at the beginning of 2024.
Consumer prices in January were 2.9 percent higher than in the same month last year, according to preliminary data from the Federal Statistical Office.
This is the lowest value since June 2021 when it was 2.4 percent.
In December the annual inflation rate was 3.7 percent.
Despite the increase in the CO₂ price to 45 euros per ton of carbon dioxide (CO₂), energy cost 2.8 percent less in January than a year earlier, according to preliminary data.
Food prices rose by 3.8 percent.
The price increase here continued to weaken after an increase of 4.5 percent in December and 5.5 percent in November.
Economists expect the inflation rate to fall further
Economists expect the inflation rate to fall further this year.
However, according to data from the Munich Ifo Institute, more consumer-related companies in this country want to increase their prices.
“Inflation is therefore only likely to fall slowly in the coming months,” predicted Ifo economics chief Timo Wollmershäuser.
According to the plans of the companies surveyed, the prices of food and beverages are likely to increase somewhat more.
Restaurants and hotel stays are likely to become more expensive.
The price pressure on clothing retailers, however, has eased somewhat.
According to the Ifo survey, tour operators are also planning slightly fewer price increases than in December.
Compared to the previous month of December 2023, consumer prices rose by 0.2 percent in January 2024, according to preliminary data.
High inflation rates are putting pressure on consumers
Higher inflation rates reduce the purchasing power of consumers, meaning they can then afford one euro less.
The burden on people caused by inflation was also high last year.
The annual average inflation rate was 5.9 percent, which was lower than in 2022 when it was 6.9 percent.
But it was still the second highest annual average since reunification.
After the start of the Russian war of aggression on Ukraine in February 2022, energy and food prices in particular rose sharply, driving up inflation overall.
The European Central Bank (ECB) is aiming for stable prices with 2.0 percent inflation for the euro area as a whole in the medium term.
In order to curb high inflation, the monetary authorities have raised key interest rates in the currency area ten times in a row since the summer of 2022.
Higher interest rates make loans more expensive, which can slow down demand and counteract high inflation rates.
However, more expensive loans are also a burden for the economy because loan-financed investments become more expensive.
dpa