German inflation falls to lowest point in two years

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Written on Mar 12, 2024

Reading time 2 minutes

This morning, Destatis announced that German inflation fell in February to 2.5%.
Not only does this represent a 0.4% reduction on January's inflation reading, it signifies more.
The fact that this is Germany's lowest inflation in two years could pave the way for imminent rate cuts.

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This morning, Germany’s Federal Statistical Office, Destatis, announced the country’s inflation figures for February.

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According to this morning’s figures, inflation dropped a further 0.4% in Europe’s largest economy, to a reading of 2.5% in February 2024.

The news of decreasing inflation came after an already-lower reading in January of 2.9% CPI for the German nation.

This is the lowest inflation figure for the country in two years. The last time inflation was lower than in February 2024 was in June 2021, when it stood at +2.4%.

Lower energy and food but higher consumer prices

Speaking on the data this morning, Ruth Brand, President of the Federal Statistical Office, said that:

The price situation for energy products continues to ease. The increase in food prices has slowed markedly and is now below the overall inflation rate for the first time in more than two years.”

However, the Federal Statistical Office also reported that Germany’s consumer prices in February 2024 rose by 0.4% compared to January 2024.

Rate cuts imminent?

As has been hinted at in the media, and by European Central Bank president Christine Lagarde, the fact that this is Germany’s lowest inflation in two years could pave the way for rate cuts coming soon.