Inflation in Germany +3.7% in December 2023

Energy prices and food: a look at the factors behind the expected rise in the inflation rate to +3.7% in Germany in December 2023

Wiesbaden - The inflation rate in Germany is expected to be +3.7% in December 2023, as announced by the Federal Statistical Office (Destatis). This calculation is based on the change in the consumer price index (CPI) compared to the same month of the previous year. According to preliminary results, consumer prices will rise by 0.1% in December 2023 compared to the previous month. An annual average inflation rate of +5.9% is expected for 2023.

Energy prices continue to rise

The reason for the +4.1 % increase in energy prices in December 2023 compared to the same month of the previous year is a base effect of the so-called "December emergency aid" of the previous year. In December 2022, the federal government took over the monthly discount for private households for gas and heating, which had a dampening effect on the overall index. This now led to an increased price effect in December 2023. In contrast, the price increase for food weakened further and was +4.5% compared to the same month in the previous year.

The Federal Statistical Office offers a personal inflation calculator to give consumers an individual assessment of their personal inflation rate. This makes it possible to adjust monthly consumer spending for different areas of goods according to individual consumption behavior and thus calculate a personal inflation rate.

Higher inflation expected in 2024

Persistently higher inflation is also expected in Germany in 2024. The current government measures, such as the increase in the CO2 tax, are likely to contribute to this. The critical verdict on the climate package in particular could intensify negative effects. Experts are forecasting an increase in inflation of up to 0.8 percentage points as a result of these developments.

This increased inflation in Germany is also likely to influence the European Central Bank. Rising inflation in the eurozone's largest economy could make it difficult to lower the key interest rate. This in turn could put additional pressure on the economy and bring further challenges, particularly for VCs and start-ups.