As of: February 9, 2024, 10:55 a.m
By: Lisa Mayerhofer
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Inflation in Germany fell to its lowest level in two and a half years at the beginning of the year.
However, food remains a price driver.
An overview.
Berlin – There is good news in 2024: Falling energy prices pushed inflation in Germany to its lowest level in two and a half years at the beginning of the year.
Consumer prices only rose by an average of 2.9 percent compared to the same month last year, as the Federal Statistical Office confirmed an earlier estimate on Friday.
Falling energy prices are depressing inflation
The last time there was a lower inflation rate was in June 2021 at 2.4 percent; in December 2023 it was still at 3.7 percent.
“The price situation for energy products is visibly easing and food price increases are continuing to slow,” said the President of the Federal Statistical Office, Ruth Brand, explaining the decreasing inflationary pressure.
Inflation is falling, but food continues to drive prices.
(Symbolic image) © Martin Wagner/Imago
Energy prices fell by 2.8 percent in January compared to the same month last year - despite the removal of energy price brakes and the CO2 price increase from 30 to 45 euros per ton.
Household energy cost 3.4 percent less than in January 2023, while fuels such as gasoline were 2.0 percent cheaper.
Solid fuels (-13.9 percent), heating oil (-9.3 percent), electricity (-6.8 percent) and natural gas (-6.2 percent) also cost less.
District heating, on the other hand, rose in price by 13.3 percent within a year.
Which foods are becoming more expensive despite falling inflation
Food once again remained a price driver: it rose in price by 3.8 (December: +4.5) percent.
In particular, consumers had to pay more for sugar, jam, honey and other confectionery (+10.7 percent) than in January 2023. Also for fruit (+10.2 percent) and vegetables (+8.0 percent) as well as for They had to pay noticeably more for bread and grain products (+5.4 percent).
In contrast, dairy products (-4.6 percent) as well as cooking fats and oils (-9.1 percent) were cheaper.
Here, sunflower oil, rapeseed oil and the like (-21.6 percent) as well as butter (-17.5 percent) became cheaper, while olive oil (+46.0 percent) became significantly more expensive - also due to crop failures as a result of drought in southern Europe.
In 2024 there are signs of a weakening in price inflation
Services cost 3.4 (December: +3.2) percent more.
Restaurant prices rose by 6.6 percent.
Since the beginning of the year, the old VAT of 19 percent has been due again in the catering industry, no longer the temporarily reduced rate of seven percent.
Core inflation – which excludes energy and food prices – fell from 3.5 to 3.4 percent.
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There are signs that inflation will weaken in 2024.
The Ifo Institute only expects inflation to reach 2.2 percent.
In 2023 prices had risen by 5.9 percent.
However, the decline is likely to be bumpy, as more consumer-related companies want to increase their prices in the coming months, as the Ifo Institute found in its survey.
(lma/Reuters)