Germany Inflation Reaches The Lowest Level

Germany Inflation Reaches The Lowest Level by Adam Rosen last updated on November 14, 2023

Germany's Inflation Reaches The Lowest Level In October

Germany's inflation printed one of the lowest readings in the last 2 years. In fact, such a level was only seen in August 2021 & thus also highlights that the Eurozone inflation is also likely to go down.

In October, the inflation in Germany was recorded at 3%, according to the data released by the Federal Statistics Office.

And if we look at the prices from a YoY perspective, they increased by 4.3% during September. So, when we look at October's reading in comparison with September, there's a clear difference.

In addition, the core inflation in Germany also moved from 4.6% in September to around 4.3%. Once again, the core inflation in Germany also slowed down in October.

Inflation To Stabilize near 3%

According to Ralph from Commerzbank, the core inflation in Germany will further go down and stabilize near 3%. So, if we take that forecast into account, it appears that the inflation will further cool down in the coming months.

He also added that the inflation rate will stay higher than the ECB target even in the year 2024. So, it appears that inflation will go down, but the speed of decline will not be enough to achieve the ECB target.

And since we are talking about persistent inflation in the Eurozone, it also means higher interest rates and maybe more tightening from the ECB.

According to ING, inflation will rise due to derisking, demographic change, and geopolitics. They added that it might even force the ECB to rethink its 2% inflation target.

In other news, the Q3 GDP data from Germany showed that the economy didn't shrink as much as the experts were initially thinking! However, factors like high-interest rates and weak buying power still continue to affect the economy.

In Q3, the GDP of Germany dropped by 0.1% Q/Q basis if we look at the values based on adjusted terms.