Germany Inflation (PPI, ann. var. %, aop)

Inflation in Germany

Harmonized inflation drops to lowest level since March 2022 in April

Harmonized inflation came in at 7.6% in April, which was down from March’s 7.8%. April’s reading represented the weakest inflation rate since March 2022. The result was largely due to a more moderate increase in prices for food and non-alcoholic beverages.

The trend was unchanged, with annual average harmonized inflation coming in at March’s 9.3% in April. Meanwhile, consumer price inflation edged down to 7.2% in April from March’s 7.4%. Inflation excluding energy and food—a measure of core inflation—was stable at 5.8% in April.

Finally, harmonized consumer prices rose 0.56% in April over the previous month, below the 1.05% rise logged in March. April’s result marked the weakest reading since January.

Our panelists expect average inflation to ease to 4.1% by Q4 2023. A tougher base effect and government measures will push price pressures down. The recent fall in natural gas prices is a downside risk to the outlook. Stubbornly high core inflation—which remained frozen in April—is an upside risk.