The inflation rate in Germany currently remains stable at 2.1 percent, which is attributed to declining energy prices. This development is part of a broader trend, where inflation has been decreasing since the beginning of the year. In January and February, the inflation rate was still at 2.3 percent, and in March, it was at 2.2 percent.
Factors Influencing the Inflation Rate
- Energy Prices: Energy prices have fallen significantly, which dampens the inflation rate. This is due to declining global market prices for crude oil, influenced by global economic developments.
- Food: Despite the overall lower inflation rate, food remains a price driver. In April and May, food prices increased by 2.8 percent.
- Services: Prices for services have also risen, supporting inflation. In April, the increase was 3.9 percent, and in May, it was 3.4 percent.
Possible Impacts of International Tensions
International tensions, particularly in the Middle East, could jeopardize the stability of the inflation rate. Such tensions lead to:
- Increased Uncertainty: They cause increased uncertainty in the markets, which can negatively impact the economy.
- Price Increases in Raw Materials: Particularly for oil, prices may rise, increasing energy costs and fueling inflation.
- Long-term Effects on Investors and Savers: Higher inflation can lead to lower real returns for investors and decrease the purchasing power of savers.
Forecasts and Outlook
The inflation rate in Germany is estimated to average around 2.1 percent for the year 2025. In the long term, it is expected that the inflation rate could continue to decline, reaching about 1.9 percent in 2027. However, these forecasts depend on many factors, including global economic developments and political tensions.