The final and detailed version of the German consumer prices for the month of March was published this morning by the Federal Statistical Office. Year-on-year, they are still rising by an astonishing 1.4 percent. One would have had to think nevertheless actually that the oil price crash pulls the consumer prices for gasoline and fuel down in such a way that the entire price cut runs even toward zero line ? But no. The total average is saved by rising food prices, if one wants to call it in such a way.
Consumer prices for food prevent falling inflation rate
Consumer prices for food rose by 3.7 percent year-on-year in March. In particular, the prices of meat and meat products and fruit rose by 8.8 percent each. One can now imagine that these price increases for food may have something to do with the Corona crisis. But before the crisis, there were also decent price increases in this sector. And on the other hand, with the brutal drop in the price of oil in recent months, one could have assumed that consumer prices for oil products would fall much lower. But is that still coming in April? In March in any case the final customer prices for fuel oil fall in the annual comparison by 19,6 per cent, fuels by 3,3 per cent. Since the industry in Germany was strongly run down, recently also the electricity prices had clearly fallen.
It is therefore already amazing that the consumer prices for electricity in March are 4.5 percent higher than in March 2019, which is why the “energy products” only drop by 0.9 percent on average. So, the energy sector as a whole has a slightly dampening effect on consumer prices, and food keeps the average up! And then we look at price factors like package holidays. They are dropping in price by 3.4 percent. Will there be further significant drops in consumer prices in the coming months if tour operators try to attract holidaymakers with discounts after the big reboot of the economies? Well conceivable. Also, as we said, one should keep an eye on the possibility that petrol prices will fall even further in April, which could further weaken the overall average in April.