Home News Germany’s inflation stood at 7.4% as predicted

Germany’s inflation stood at 7.4% as predicted


Consumer price index in Germany, March 2023
+7.4% on the same month a year earlier (provisional result confirmed)
+0.8% on the previous month (provisional result confirmed)

Harmonised index of consumer prices, March 2023
+7.8% on the same month a year earlier (provisional result confirmed)
+1.1% on the previous month (provisional result confirmed)

The inflation rate in Germany, measured as the year-on-year change in the consumer price index (CPI), stood at +7.4% in March 2023. In both January and February 2023, the inflation rate had been +8.7%. “The rate of inflation has slowed but remains at a high level”, says Ruth Brand, President of the Federal Statistical Office. She adds: “Households felt especially the impact of yet another rise in food prices in March.” The Federal Statistical Office (Destatis) also reports that consumer prices in March 2023 were up 0.8% on February 2023.

Prices of energy products up 3.5% year on year

Energy product prices were 3.5% higher in March 2023 than a year earlier. The increase in energy product prices thus slowed considerably, remaining below the inflation rate. It stood at +19.1% in February and +23.1% in January. Due to the previous year’s strong rise in energy prices, the figure for March 2023 was however subject to a base effect. Motor fuels cost considerably less (-16.1%) than a year earlier. Energy prices are subject also to the electricity, natural gas and district heating price brakes taking effect retrospectively from January 2023. The overall development of energy prices is however influenced by many factors, especially international purchase prices.

A particularly large increase was again recorded for household energy prices from March 2022 to March 2023 (+21.9%). There were price rises of 39.5% for natural gas, 17.1% for electricity and 16.4% for district heating. Above-average price increases of other household energy products also continued, with prices of firewood, wood pellets and other solid fuels up 39.4%, for example. Heating oil prices, in contrast, decreased substantially by 35.7%.

22.3% increase in food prices year on year

Food prices were up 22.3% in March 2023 compared with the same month a year earlier. The rise in food prices thus accelerated even more (February 2023: +21.8%; January 2023: +20.2%) and meanwhile stands at three times the overall inflation rate. As in the preceding months, higher prices were recorded for all food groups in March 2023. There were substantial price rises especially for dairy products and eggs (+34.6%). There were considerable year-on-year price increases also for vegetables (+27.3%), bread and cereals (+23.8%) as well as fish products and seafood (+22.2%). Very high price rises were observed for some foodstuffs. Consumers had to pay 70.9% more for sugar than in the same month of the previous year, for instance.

Inflation rate excluding energy and food at +5.8%

The rate of inflation excluding energy stood at +7.8% in March 2023 and thus was higher than the overall rate of inflation, which means that energy prices currently even have a slight downward effect on inflation. To what extent food prices currently affect overall inflation is revealed when energy and food are excluded. The resulting rate was markedly lower (+5.8%). Furthermore, the inflation rate excluding energy and food shows that inflation is high also for other product groups. The rate had been above the five-percent threshold in December 2022 already and increased slightly again after standing at +5.6% in January 2023 and +5.7% in February 2023.

Prices of goods up 9.8% on March 2022

The prices of goods (total) were up 9.8% in March 2023 compared with the same month a year earlier. The price increase was particularly large for non-durable consumer goods (+11.9%), which was mostly due to the rise in food prices. Considerably higher prices had to be paid also for non-durable consumer goods for personal care (+14.6%), beer (+13.6%) and non-alcoholic beverages (+13.2%). Prices of durable consumer goods were up 6.2% on the same month of the previous year. Substantial price increases were observed especially for furniture and lighting equipment (+10.3%) as well as new cars (+7.5%).

Service prices up 4.8% year on year

The prices of services (total) were up 4.8% in March 2023 on the same month of the previous year. Net rents exclusive of heating expenses rose 2.1%. Above-average price increases were observed for some services such as maintenance and repair of dwellings (+16.6%), catering services in restaurants, cafes and the like (+10.8%) and services of social facilities (+9.8%). Prices were down year on year only for a very small number of services, for instance, telecommunications services (-0.9%).

Prices up 0.8% month on month, with food prices increasing 1.3%

Compared with February 2023, the consumer price index rose by 0.8% in March 2023. Considerable seasonal price increases were observed especially for package holidays (+9.2%), air tickets (+8.5%) and clothing (+5.1%). Households also had to pay more for food in general than in the preceding month (+1.3%), especially for vegetables (+6.5%). Again there was a striking drop in the prices of edible fats and oils (-3.1%), especially of butter (-7.0%), from a month earlier. Energy prices (total) remained unchanged. Some energy products saw price increases nevertheless; the prices of district heating (+1.2%) and natural gas (+0.7%) went up in spite of the price brakes. Along with these price increases, some decreases were observed, among others, for heating oil (-2.3%) and electricity (-0.6%). Motor fuel prices (total) remained nearly unchanged (-0.1%, including supergrade petrol: +0.3%, diesel fuel: -1.6%).

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