Germany’s consumer price inflation eased markedly in March as the sharp increase in energy prices seen over the same period last year dropped out of the annual comparison, flash estimate from Destatis showed Thursday.
Consumer prices increased 7.4 percent year-on-year in March but this was notably weaker than the 8.7 percent increase registered in February.
Prices were expected to climb 7.3 percent in March. The latest inflation was the weakest in seven months.
Inflation based on the harmonized index of consumer prices, or HICP, fell to 7.8 percent from 9.3 percent in the previous month. The expected rate was forecast to ease to 7.5 percent.
Food prices showed an above average growth of 22.3 percent in March. Meanwhile, the increase in energy prices slowed considerably to 3.5 percent annually after prices had soared in March 2022 when Russia attacked Ukraine.
On a monthly basis, consumer prices gained 0.8 percent and the HICP moved up 1.1 percent. Economists had forecast the CPI to climb 0.7 percent and the HICP to gain 0.8 percent.
Final results for March will be published on April 13.
Despite the sharp drop in headline inflation, there are still no signs of any broader disinflationary trend outside energy and commodity prices, ING economist Carsten Brzeski said.
Excluding energy, the price increase has actually intensified, keeping up the pressure on the European Central Bank to raise interest rates further, Ralph Solveen, a senior economist at Commerzbank, said.
In February, Eurozone inflation slowed to 8.5 percent from 8.6 percent in January. However, core inflation in the currency bloc accelerated to a record 5.6 percent in February. Flash inflation data for the current month is due on March 31.
Earlier this month, the European Central Bank had hiked its interest rates by 50 basis points as inflation is expected to remain “too high for too long”.
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