German consumer inflation slowed for the second month in a row to 7.2 percent in April, the Federal Statistical Office (Destatis) said on Wednesday, confirming earlier figures.
Despite the slight drop, inflation in Europe’s largest economy “remains at a high level,” Destatis President Ruth Brand said, stressing that food prices continued to be the “biggest driver of inflation.”
The current upward trend in food prices has weakened slightly. After soaring to 22.3 percent year-on-year in March, prices across all food groups were still up 17.2 percent in April. Dairy products, such as butter and milk, were becoming twice more expensive.
German consumers are starting to adjust their grocery shopping. Retail food sales in March were down 10.3 percent in real terms. This was the sharpest year-on-year sales decline since records started in 1994, according to Destatis.
Prices for energy products accelerated again in April and were up 6.8 percent year-on-year. To lower energy prices for consumers, the German government introduced a 200-billion-euro (219 billion U.S. dollars) price brake for natural gas and electricity that took effect at the beginning of the year.
“However, the biggest price increases are likely to be behind us, and we expect further declines for both food and energy,” Jan-Christopher Scherer, economic expert at the German Institute for Economic Research (DIW Berlin), told Xinhua on Wednesday.
According to the government’s latest forecast, annual inflation in Germany will remain high at 5.9 percent this year before falling to 2.7 percent next year.
“The inflation outlook continues to be too high for too long,” the European Central Bank (ECB) said last week, when it raised the main interest rates by another 25 basis points. To tackle high inflation in Europe, which has long been above the desired target of 2 percent, the ECB has increased its main interest rates seven times since last July. (1 euro = 1.10 U.S. dollar) ■
