Inflation in Germany currently: price trend in September 2024 before the interest rate decision

Wiesbaden – Falling inflation, falling interest rates – that could breathe some life into the German economy. Today the Federal Statistical Office is publishing the first estimate for inflation in September. According to a Reuters survey, economists expect a decline from 1.9 to 1.7 percent year-on-year – that would be the lowest rate since February 2021.

Cheaper energy has curbed inflation in recent months. Germans paid significantly less at the pump in August (minus 6.9 percent year-on-year). Inflation is primarily fueling rising service prices, which are 3.9 percent higher than in the same month last year.

Important to know: At the euro level, statisticians calculate inflation slightly differently, which is why there are 2 inflation values ​​for Germany – in addition to the regular one, there is also the so-called Harmonized Consumer Price Index. The level in August was a bit higher, namely 2 percent.

Falling prices at B2B level – consumers are not in the mood to buy

There are also signs of easing in wholesale, at manufacturer level and in imports: While imports only increased in price by 0.9 percent year-on-year (July), producer prices fell (minus 0.8 percent) and wholesale prices (minus 1.1). even back in August.

Due to the decline in inflation and an increase in rents and wages, consumers can look forward to more purchasing power. But consumer sentiment remains gloomy. The GfK consumer climate stabilized at a low level in September (minus 21.2 points). The economy and jobs are a cause for concern.

Forecast: German GDP will decline – inflation in 2025 at ECB target

Rightly so: the German economy will shrink by 0.1 percent in 2024 – this is what the leading economic institutes predict in their autumn report. In the spring they had assumed a plus of 0.1 percent. The experts have reduced the GDP estimate for 2025 from 1.4 to 0.8 percent.

Things are looking better for consumer prices: the joint diagnosis from the DIW in Berlin, the Munich ifo Institute, the IfW Kiel, the IWH in Halle and the Essen RWI assumes 2.2 percent inflation in 2024. Economists expect price increases of 2 percent in 2025 and 2026.

France with strong opposite – ECB interest rate cut on October 7th?

Internationally, Germany is a model student when it comes to inflation. In August, the world’s third largest economy was doing better than the euro area (2.2 percent) and the USA (2.5 percent). But the September figures make France sit up and take notice, with a disadvantage of 0.7 to 1.5 percent.

This suggests that price pressure in the Eurozone is easing – which is putting pressure on the European Central Bank to act, especially as the economy is sputtering. According to reuters.de, the markets are now betting on a further interest rate cut of 25 basis points at the next central bankers meeting on October 17th.