Inflation in Germany has fallen to the lowest level in about three and a half years. In September, consumer prices were 1.6 percent above the level of the same month last year, the Federal Statistical Office announced on Monday.
Consumers had to pay considerably less for energy in particular than in August (minus 7.6 percent). However, prices for food and services rose.
Inflation in Austria’s neighboring country has already fallen significantly in recent months. The world market recorded 1.9 percent in August and 2.3 percent in July. Economists assume that inflation will continue to decline. A price increase of 2.2 percent is expected this year and only two percent for 2025.
Decline in consumption
The fall in inflation has not yet had any consequences for consumption. It is said that many Germans currently prefer to save rather than spend their money on a house or consumption. Private consumption is considered an important support for the German economy. According to Statistics Austria, inflation in Austria fell to 2.4 percent in August.
“Recent developments reinforce our confidence that inflation will return to target levels in a timely manner. We will take this into account at our next monetary policy meeting in October,” Christine Lagarde, president of the European Central Bank, said in a statement. If inflation in Germany falls in the eurozone as a whole, key interest rates could be reduced.
The ECB recently lowered the deposit rate by 0.25 percentage points to 3.5 percent. The basic refinancing rate at which banks can borrow money was reduced by 0.6 percentage points to 3.65 percent. Further interest rate steps are already expected on the stock exchanges.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
