Germany's consumer price index rose in line with forecasts in March

According to the report from the Federal Statistical Office (Destatis), the inflation rate in Germany, measured as the year-on-year change in the consumer price index, stood at +1.7% in March 2021. The inflation rate was positive for the third month in a row after the temporary reduction of the value added tax rates had ended, and it increased once again (February 2021: +1.3%). Destatis also reports that consumer prices rose by 0.5% compared with February 2021.

The prices of goods (total) rose by 1.9% from March 2020 to March 2021. Energy product prices were 4.8% higher than a year earlier. Following the +0.3% rise in February 2021, the year-on-year price increase accelerated markedly. Higher prices than in March 2020 were recorded especially for heating oil (+19.4%) and motor fuels (+12.7%) in March 2021. Natural gas prices also increased on a year earlier (+2.2%), and electricity prices remained nearly unchanged (0.1%). Food prices rose by 1.6%. Higher prices were recorded in particular for fruit and dairy products (+2.5% each). Marked price rises were also observed for tobacco products (+4.3%), although with a lower weight, while notable decreases were recorded, for instance, for mobile phones (-8.2%).

The marked year-on-year increase in energy product prices had an upward effect on the inflation rate. Excluding energy prices, the inflation rate would have been +1.4% in March 2021; excluding the prices of heating oil and motor fuels, it would have been only +1.3%.