Inflation in Germany is no longer as strong as before in November. This is the result of an initial estimate by the Federal Statistical Office. The rise in prices was mainly dampened by cheaper energy.
The increase in consumer prices was lower in November than in the previous month. The consumer price index rose by 3.2 percent in the past month compared to the same period last year. Compared to the previous month, consumer prices even fell slightly by 0.4 percent. This is the initial estimate from the Federal Statistical Office. In October the price increase was 3.8 percent.
This is the lowest level since June 2021, when it was 2.4 percent. In September the annual inflation rate was 4.5 percent and in August it was 6.1 percent. At the beginning of the year, the inflation rate had even reached eight percent.
Energy continues to become cheaper and food becomes more expensive
Compared to the previous year, goods rose in price by an average of 3.0 percent and services by 3.4 percent. The core rate excluding energy products and food fell to 3.8 percent from 4.3 percent in the previous month.
Above all, the decline in energy prices also led to lower overall inflation in November. Energy cost 4.5 percent less in November than a year earlier. In contrast, according to preliminary data, food prices rose above average by 5.5 percent. However, the increase was no longer as strong as in previous months.
Purchasing power in Germany increased slightly
Inflation potentially reduces consumers’ purchasing power if citizens’ wages and salaries do not rise at the same rate. In recent months, however, Germans have even seen real wage increases again thanks to high wage agreements.
The sharp rise in inflation last year also resulted in several interest rate increases by the European Central Bank (ECB), which were intended to curb price increases. The ECB aims for inflation of no more than two percent if possible. Since inflation rates are now moving downwards again in Germany and many countries in the Eurozone, the interest rate hikes may have come to an end. Experts even believe that interest rate cuts will be possible again next year.