German inflation falls to slowest pace since mid-2021
January 31, 2024
German consumer prices rose 2.9% annually in January, down from 3.7% in December, according to preliminary data from federal statistics agency Destatis released on Wednesday.
The data office said it is the lowest figure since June 2021, when the consumer price index (CPI) rose 2.4%.
Energy cost 2.8% less in January than the previous year.
The cost of food increased by 3.8% year-on-year in January, lower than the 4.5% recorded in December and 5.5% in November.
Hopes for interest rate cuts
Although inflation in Europe’s largest economy has resumed its downward trend, it may not be enough for the European Central Bank (ECB) to consider lower financing costs in the short term.
On January 25, the ECB kept key interest rates stable in an attempt to bring eurozone inflation back to its 2% target.
ECB President Christine Lagarde said last week that the first reduction would “probably” only occur in the summer, and only if the latest economic data supported it.
Survey data released on Wednesday by the Munich-based Ifo Institute economic research group indicated that many consumer-facing companies in Germany plan to raise prices next year.
“Inflation is therefore expected to fall only slowly in the coming months,” said ifo director of economic research Timo Wollmershäuser.
lo/wmr (dpa, afp, Reuters)
Source: DW
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.