German Inflation Accelerates Further, Registering 1.7% Y/Y in March

30 March 2021

By David Barwick – FRANKFURT (Econostream) – Consumer prices in Germany accelerated for the third month in a row in March, growing at an annualized 1.7%, according to the flash estimate of the German Federal Statistical Office on Tuesday.

The increase was the highest since 1.7% in February of last year and represented a renewed acceleration of prices after January’s 1.0% and February’s 1.3% were preceded by negative readings in each of the last four months of last year. On the month, German CPI in March came in at 0.5%.

On a harmonized basis, the flash estimate of German inflation was higher yet, at 2.0%, as compared to the ‘below, but close to, 2%’ threshold for price stability used by the European Central Bank.

‘In the second half of the year, high HICP rates can then be expected temporarily due to the base effect of the VAT cut in the previous year’, the German Bundesbank said in its latest monthly bulletin released last week. ‘From today’s perspective, they could clearly exceed 3% at times by the end of the year.’

The Statistical Office will release final figures for March on April 15.