Decrease in German Inflation Rate Persists at 1.6%
Germany's inflation rate plunged to its lowest point since February 2021 in September. Consumer prices went up by a modest 1.6% compared to the same period last year, primarily due to a significant drop in energy expenses.
According to the Federal Statistical Office, the inflation rate in Germany slipped to its lowest level this September since February 2021. Consumers noticed an overall price increase of 1.6% compared to the previous year. Just a month prior, inflation was at 1.9%. Economists had anticipated a decline to 1.7%. Between August and September, consumer prices remained static.
Energy expenses dropped by approximately 7.6% in August compared to the same period the previous year. Conversely, services experienced a higher-than-average increase of 3.8%. Many businesses are attempting to transfer rising labor costs to their clients. Food prices climbed by an average of 1.6% compared to September 2023.
The European Central Bank (ECB) sets a target inflation rate of 2% for the currency zone. This target is now within reach. The German inflation rate, calculated under European standardized protocols, decreased to 1.8% in September. The ECB adjusted its interest rate policy in June and then again in September. Currently, financial experts are speculating whether ECB governors, headed by President Christine Lagarde, will implement an additional interest rate reduction in October or December.
The German inflation rate, calculated according to European standards, also fell to its lowest point since February 2021 in September, reaching 1.8%. Consequently, the European Central Bank (ECB) is now closer to reaching its target inflation rate of 2%.
