German inflation drops to 7.4 pct in March – Destatis

Inflation in Germany slowed to 7.4 per cent in March, dropping below the eight per cent mark for the first time since August 2022.

This is according to confirmed figures published by the Federal Statistical Office (Destatis) on Thursday.

“The rate of inflation has slowed but remains at a high level,” Destatis President Ruth Brand said in a statement.

“Households especially felt the impact of yet another rise in food prices in March.”

After energy prices, food prices were now fueling inflation in Europe’s largest economy.

They accelerated in March, up 22.3 year-on-year, according to Destatis.

As in the previous months, higher price increases were recorded for all food groups.

Energy prices, on the other hand, slowed down significantly.

The prices were only up 3.5 per cent year-on-year, after still rising by 19.1 per cent in February.

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Destatis stressed that low figure was subject to base effect due to previous year’s strong price rise.

The strong price comes after the start of the Russia-Ukraine conflict.

Government measures, such as a massive 200-billion-euro ($221 billion) price break for electricity and natural gas, have also driven down consumer prices.

“The overall development of energy prices is, however, influenced by many factors, especially international purchase prices,” Destatis noted.

Also on Thursday, the Association of German Chambers of Industry and Commerce (DIHK) warned that only 41 per cent of the country’s industrial companies intend to invest abroad.

This is due to high energy prices and a slowdown in the global economy, the lowest figure since 2009.

At the same time, almost every third company that wants to invest abroad is doing so in response to a deteriorating cost structure in Germany.

“This should be a wake-up call to policymakers to improve the conditions in Germany as a business location,” DIHK’s Chief Executive of Foreign Trade, Volker Treier, said in a statement. (Xinhua)