Germany’s inflation rate eased to 2.5% in February year-on-year, confirming the country’s rising consumer prices slowdown.
Inflation in Germany continues to cool, hitting an annual rate of 2.5% in February, down from 2.9% in January and 3.7% the month before.
The German Federal Statistical Office confirmed the provisional figures on Tuesday, making this the lowest rate at which prices in Germany have risen since June 2021, when inflation stood at 2.4%.
“The price situation for energy products continues to ease,” said Ruth Brand, president of the Federal Statistical Office. “The increase in food prices has slowed markedly and is now below the overall inflation rate for the first time in more than two years.”
Indeed, the drop in energy prices has played a significant part in February’s inflation rate figures, with energy costing on average 2.4% less last month than it did at the same time last year.
The trend is even stronger for household energy prices, which cost 3.6% less in February of this year compared to last year – and this, despite the introduction of a higher carbon price at the beginning of this year.
Food prices on the other hand went up last month, particularly for bread, cereal and most of all oils, with olive oil prices registering a steep hike of 50.8% compared with February 2023.
Nonetheless, the decreased prices of other commonly consumed foods such as dairy products (-5.1%) and fresh vegetables (-10.6%) allowed food prices not to weigh too negatively on February’s overall consumer price index (CPI).
Germany’s inflation rate is now back to its mid-2021 level, prompting optimism as to the worst of the cost of living crisis being over – when CPI peaked at 8.8% in the final months of 2022.
The country’s cooling inflation echoes a similar trend in some of its European neighbours. Despite this glimmer of optimism, the European Central Bank decided to remain cautious earlier this month, keeping its benchmark interest rates on hold at 4.5%, matching market expectations.