German inflation drops to lowest level in over 2 years

Year-on-year inflation in Germany for October dropped to 3.8%, its lowest level in more than two years, according to final figures released on Wednesday.

While the figure is a marked decrease from September's 4.5% rise, it is still far higher than the European Central Bank's target of 2%.

What does the latest figure show?

The inflation figure, released by Germany's Federal Statistical Office, Destatis, is dramatically lower than earlier in the year when it was more than 8% year-on-year.

A drop in energy prices of 3.2% was particularly potent in driving down the October figure. A surge in energy prices that followed Russia's invasion of Ukraine in February 2022 previously played a major role in pushing prices upwards.

However, while fuels fell markedly in price, electricity remained noticeably more expensive, up 4.7%.

Food prices increased by 6.1% in October compared to the same month last year, although the rises showed another slowing down compared with previous months. In September, food prices rose by 7.5% year-on-year, and in August by 9.0%.

How significant is the decrease?

"The inflation rate remains high in the medium and long term. In particular, the increased prices for food and energy over the long period of war and crisis continue to be noticeable for consumers," said the president of the Federal Statistical Office, Ruth Brand.

"The price increase at the consumer level is currently easing somewhat," she added. "The annual inflation rate for food has continued to weaken and most energy products have even become cheaper within a year."

rc/nm (AFP, dpa)