German inflation hits 3.2%, lowest since June 2021
Germans have received new data on the increasing prices of goods and services. The data suggests that inflation for November was 3.2 percent. "This is the lowest level since June 2021," remarks "Deutsche Welle". Interestingly, the situation is favorable throughout the entire Eurozone, according to the Bloomberg agency.
The estimated inflation was provided by the Federal Statistical Office in Wiesbaden. A rate of 3.2 percent is the lowest it has been in almost a year and a half. Back in June 2021, it was 2.4 percent. As compared to October, the cost of consumer goods and services has decreased by 0.4 percent, reports "Deutsche Welle".
"Energy prices are lower than last year due to a significant decrease in oil prices despite the escalating conflict in the Middle East. Energy expenses are 4.5 percent lower. On the other hand, inflation is being driven by food prices, which cost an average of 5.5 percent more than they did in November 2022. Service costs have risen by 3.4 percent. Core inflation, excluding food and energy prices, was at 3.8 percent," noted "DW".
In the meantime, economists surveyed by Reuters expect inflation to weaken in the long run. Nevertheless, Germans should anticipate a temporary price and service increase, peaking at about 4 percent in December, before dropping below 3 percent in early 2024.
Surprising Inflation in Germany, not necessarily positively
German media has widely commented on the inflation rate. Regardless, the press emphasizes that the public may find it hard to believe in such a positive November reading.
"Anyone who goes shopping in supermarkets, fills up their car with fuel, pays rent, or enjoys a holiday trip might be astonished to see November's inflation at only about 3 percent. The truth, however, is that the Federal Statistical Office revised their 'weighting scheme' this year. The most significant change relates to housing, which also includes household energy expenses," stated "Volksstimme", from Magdeburg in Saxony-Anhalt.
The business newspaper "Handelsblatt" offers a positive outlook: "From a temporal perspective, this phase of monetary policy can be considered relatively successful. It is unusual for central banks to deal with two significant events simultaneously: the economic repercussions of the war in Ukraine and the pandemic. In this context, it is not surprising that price increases could not be halted sooner."
Anticipating a Cut in Eurozone Interest Rates
The entire Eurozone reports a surprisingly positive inflation reading, as noted by the Bloomberg agency. Year over year, the prices of services and goods rose by 2.4 percent in November. A month earlier, this figure was 2.9 percent.
"Eurozone inflation has cooled more than expected, bringing the 2 percent target in sight, as investors increasingly expect the European Central Bank to lower interest rates earlier than officials indicate," Bloomberg writes.
Though the rate of price growth in the Eurozone is slowing, it's not without a cost. "Production is also waning. The Gross Domestic Product shrank in the third quarter by 0.1 percent, putting the region on the edge of a recession," Bloomberg agency reports.
