Rising energy prices and price increases for travel at easter pushed the rate of inflation in germany up again slightly.
Consumer prices in march were 1.6 percent higher than in the same month of the previous year, according to the federal statistical office, based on preliminary data. In february, inflation had stood at 1.4 percent; in january, it was also 1.6 percent.
According to calculations by the wiesbaden authorities, energy prices rose by 0.5 percent over the year, and consumers had to pay 2.9 percent more for food. Services went up by 1.8 percent – this includes rent (up 1.6 percent), which accounts for a good one-fifth of private households’ consumption expenditure. From february to march of the current year, consumer prices rose by a total of 0.4 percent.
"But when volatile energy and food prices are factored out, price inflation remains manageable," analyzed VP bank’s chief economist, thomas gitzel. The european central bank (ECB) is aiming for an inflation rate of just under 2.0 percent in the medium term for the euro zone as a whole. This value is considered a guarantee of stable prices, because it is far enough from the zero mark. If prices are permanently low or even fall across the board, this could tempt companies and consumers to postpone investments. This could put the brakes on growth. Despite zero interest rates and a flood of money, the ECB’s inflation target is still a long way off.
Many savers in germany are losing money in the zero interest rate phase. Around 2.2 billion euros are parked as overnight money or fixed-term deposits – at measly interest rates. And they are still being eaten up by the meanwhile higher inflation rate: according to comdirect’s calculation, the real interest rate – i.E. The actual interest rate for savings deposits after deducting inflation – was minus 1.31 percent in the first quarter of 2018. So savers in germany lost 7.16 billion euros or 86 euros per capita in the first three months of the current year. Since 2010, every german has lost an average of 999 euros due to savings interest rates below the rate of inflation, the commerzbank subsidiary calculated.