Food prices remain the driver of inflation in Germany
The latest data released in Germany confirm that inflation fell to 7.2 percent in April due to falling energy prices, while food prices remain the driver of inflation.
The Federal Statistical Office of Germany (Destatis) has released the final 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.
Inflation in the country increased by 0.4 percent per month. The final data confirmed previously published preliminary data.
The EU-compliant CPI also increased 0.6 percent in April compared to the previous month and 7.6 percent on an annual basis.
Energy and food stand out as the biggest price setters in Germany for months. Food prices rose 17.2 percent and energy products 6.8 percent in April compared with a year ago. While food prices decreased compared to the previous month, energy prices increased.
Excluding energy prices, annual inflation in Germany was 7.2 percent in April.
HAS PEAK INFLATION IN GERMANY?
Ruth Brand, President of Destatis, said: “The inflation rate has slowed for two consecutive months, but it remains high. Food prices continued to be the biggest driver of inflation in April.
Food prices in the country rose 22.3 percent annually in March.
While most experts said inflation peaked in Germany, which has the largest economy in Europe, they emphasized that inflation is expected to stay high for now with food prices and will continue to reduce power. consumer purchasing.
Meanwhile, leading German economic research institutes predict that inflation, which was 6.9% in 2022 on average, will slow to an average of 6% in 2023 and 2.4% in 2024.
The inflation outlook will determine how far the European Central Bank (ECB) will go with regard to raising interest rates and how quickly it will proceed.
TECHNICAL RECESSION MARRIAGE in the first quarter
Meanwhile, the German economy did not 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 “closely” into 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.
Although the bottlenecks that arose during the Covid-19 epidemic have eased, the German economy is negatively affected by stagnant demand as a result of rising interest rates, declining confidence in the economy and the decrease in consumer purchasing power. in an environment of unusually high inflation.
The German government expects 0.4 percent growth in the economy this year. Leading German economic institutes predict the country’s economy will grow 0.3 percent this year. (AA)