According to a report by Reuters, German consumer prices increased by 0.7% in February 2023, compared to the previous month, resulting in a year-on-year increase of 9.3%. The rise in consumer prices was primarily due to higher energy prices, which increased by 20.3% year-on-year, while prices for food, services, and non-energy industrial goods also contributed to the overall increase.
German Consumer Prices Soar to 9.3% YoY in February 2023 - Is Inflation the New Normal?
The report also notes that the increase in consumer prices has exceeded the European Central Bank's target of keeping inflation below 2%. The ECB has stated that it intends to keep its policy rate at its current level of 0% until inflation returns to its target level.
The German Federal Statistics Office commented on the data, stating that "Compared to the previous month, the consumer price index rose by 0.7 percent in February 2023 due to significantly higher prices for energy products. Above all, the price increases for motor fuels and heating oil, which rose by 35.2 percent and 18.2 percent respectively compared to the same month last year, were responsible for the increase."
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The report concludes by stating that the increase in German consumer prices is likely to fuel concerns about inflation in the eurozone, especially as other countries in the region are also experiencing rising prices. However, some economists believe that the current inflationary pressures may be temporary, as they are largely driven by supply chain disruptions and other factors related to the COVID-19 pandemic.
