CoM| Headline inflation in Germany fell to 7.2% year-on-year in April from 7.4% in March, matching the consensus forecast and the first estimate. The harmonised rate declined by 0.2 p.p. to 7.6%, also in line with the first estimate and the consensus. The underlying rate, which excludes energy and food, remained at 5.8 per cent.
“The inflation rate has weakened for the second month in a row, but remains at a high level,” says Ruth Brand, president of the Federal Statistical Office (Destatis), adding, “Food remained the strongest price driver among goods and services in the shopping basket in April.” Consumer prices rose by 0.4 per cent in April 2023 compared with March 2023.
The fall in food inflation, to 17.2% after 22.3% in March, was the main driver of the decline in headline inflation at the start of the second quarter. However, Destatis highlights that in April 2023, as in previous months, price increases were observed for all food groups, especially dairy (+34.8%), bread and cereals (+21.3%), fish, fishery products and seafood (+19.7%) and sugar, jam, honey and other sweets (+19.6%).
In April 2023, prices of energy products were 6.8% higher than in the same month of the previous year. After a significant weakening in March 2023 (+3.5%), inflation picked up again, but remained below the headline inflation rate. The pick-up in energy inflation was mainly due to changes in base effects following last year’s volatility in the wake of the Russian invasion of Ukraine.
