Inflation in Germany fell to 7.2 percent in April

The German Federal Statistical Office (Destatis) has announced the main data for April on price increases.

Consequently, annual inflation in Germany, which was 7.4 percent in March, slowed to 7.2 percent in April, close to expectations.

In Germany, the consumer price index (CPI) rose 0.4 percent in April compared to the previous month. The annual inflation expectation was to decrease to 7.3 percent in April.

In the same period, while energy prices increased by 6.8 percent annually, it is worth noting that the annual increase in food prices was once again above average at 17.2 percent. The increase in services was 4.7 percent.

The EU-compliant CPI also rose 0.6 percent on a month and 7.6 percent on a yearly basis in April.

FOOD PRICE IMPACT

In the Destatis statement, it was reiterated that especially energy and food prices have risen sharply since the start of the Russia-Ukraine war, which has a significant impact on inflation.

In the statement, “In April 2023, food prices continued to increase by 17.2 percent compared to the same month of the previous year, above average.” It was said.

On the other hand, the inflation outlook will determine how far the European Central Bank (ECB) will go in raising interest rates and how quickly it will proceed.

While the ECB has raised its main interest rates by 6 in a few months, analysts expect the ECB to raise interest rates again on May 5th.

Meanwhile, the German economy was unable to grow in the first quarter of this year as unusually high inflation and rising interest rates suppressed consumer spending.

Thus, after zero growth in the first quarter, the German economy did not enter a technical recession, which is expressed as “two quarters of GDP contraction”. The German economy contracted 0.5 percent in the last quarter of last year. (AA)