The inflation rate fell significantly in Germany in May to 6.1 %, the lowest level in more than a year, the Federal Statistical Office (Destatis) reported today based on preliminary data.
The increase in consumer prices thus lost pace for the third consecutive month. The last time the annual inflation rate in Germany was lower was in March 2022, when it stood at 5.9 %.
Inflation has exceeded 8.0 % since August 2022, and it was not until March of this year that it fell below this figure, that is, 7.4 %. For April, Destatis calculated a rate of 7.2 % and from April to May 2023, consumer prices fell 0.1 %, according to the calculations.
The high rate of inflation has been weighing down consumers for months, whose purchasing power is reduced. In surveys, many people say they can barely make ends meet on their money.
Food prices rose 14.9 % annualized in May, compared to an increase of 17.2 % in April and 22.3 % in March.
The upward trend in energy prices also weakened: in May 2023, energy was 2.6 % more expensive compared to May 2022, compared to 6.8 % in April.
The federal government has taken steps to try to alleviate the situation with caps on the prices of natural gas, electricity and district heating.
The introduction of the monthly public transport pass for bus and train “Deutschlandticket” from 1 May also took effect. Inflation reports from the federal states indicated that many people spent less on commuting and other travel.
The European Central Bank (ECB) is also trying to curb inflation with higher interest rates. After seven consecutive increases, the main interest rate of the 20-country monetary area now stands at 3.75 %, and further increases are expected. However, according to economists, the still high inflation in Germany and in the Eurozone as a whole will not disappear quickly.
(Reference image source: Maheshkumar Painam, Unsplash)