By John Meyer, consultant in financial affairs, for Eurasia Business News, May 10, 2023
The inflation rate in Germany, measured as the year-on-year change in the consumer price index, stood at +7.2% in April 2023, after +7.4% in March. Photo : Berlin, Germany, 2021.
The inflation rate in Germany, measured as the year-on-year change in the consumer price index (CPI), stood at +7.2% in April 2023. In March 2023, the inflation rate had been +7.4%.
“The rate of inflation has therefore slowed for the second month in a row but remains at a high level”, says Ruth Brand, President of the Federal Statistical Office. She adds: “Looking at the basket of goods and services surveyed, food prices continued to be the biggest driver of inflation in April.”
The Federal Statistical Office of Germany (Destatis) also reported that consumer prices in April 2023 rose by 0.4% on March 2023.
Prices of energy products up 6.8% year on year
Energy product prices were 6.8% higher in April 2023 than in the same month a year earlier. Following a marked slowdown in March 2023 (+3.5%), the increase in energy product prices thus accelerated again, but still remained below the overall inflation rate. The year-on-year increase in energy prices has been below average since March 2023. This is mainly due to a base effect originating from last year’s large price increases as a result of the Russian attack on Ukraine. A particularly high increase, however, was again recorded for household energy prices (total) in April 2023 compared with April 2022 (+21.1%). Above-average increases were observed in natural gas prices (+33.8%) as well as in the prices of firewood, wood pellets and other solid fuels (+29.8%).
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Consumers also had to pay significantly more than a year earlier for electricity (+15.4%) and district heating (+12.3%). Heating oil prices, in contrast, decreased substantially by 21.8%, and motor fuel prices went down by 9.4% from the previous year. On the whole, the development of energy prices is subject to many factors, such as the electricity, natural gas and district heating price brakes which have been effective since January 2023.
Food prices continue to drive inflation, increasing 17.2% year on year
April 2023 saw an above-average rise in food prices (+17.2%) from the same month a year earlier. Compared with the previous year, the increase in food prices slowed slightly, after a 22.3% increase was reported in March 2023. As in the previous months, however, higher prices were recorded for all food groups in April 2023, and in particular for dairy products (+34.8%), bread and cereals (+21.3%), fish, fish products and seafood (+19.7%), and sugar, jam, honey and other confectionery (+19.6%).
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Inflation rate excluding energy and food at +5.8%
Excluding energy prices, the inflation rate stood at +7.2% in April 2023. Excluding energy and food prices, the inflation rate was significantly lower (+5.8%) and therefore demonstrates the enormous impact of food prices on overall inflation. At the same time, this rate clearly shows that inflation is high also in other product groups. The consumer price index excluding energy and food crossed the five-percent threshold already in December 2022 and has gone up further since the beginning of the year (January 2023: +5.6%; February 2023: +5.7%; March 2023: +5.8%).
Prices of goods up 9.3% on April 2022
The prices of goods (total) were up by 9.3% in April 2023 on the same month of the previous year. The price increase was particularly pronounced for non-durable consumer goods (+11.4%), which was mostly due to the rise in food prices. Consumers also had to pay significantly more for beer (+15.0%), non-durable consumer goods for personal care (+14.4%) and non-alcoholic beverages (+13.5%) The prices of consumer durables rose by 5.9% from April 2022, including, for instance, furniture and lighting equipment (+9.9%) and household appliances (+7.7%).
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