Germany: Inflation rises in April from the prior month
Latest reading: Harmonized consumer prices increased 2.9% on a year-on-year basis in April, following a 2.8% increase in the previous month. April’s reading was the strongest since December 2024, but undershot market expectations.
Relative to the previous month’s figures, there were higher price pressures for food and non-alcoholic beverages (+1.7% in annual terms vs +1.5% in March), transportation (+7.1% vs +6.7% in March), housing and utilities (+0.9% vs +0.8% in March) and restaurants and hotels (+3.5% vs +3.4% in March). In contrast, price pressures reduced for recreation in April (+1.2% vs +2.0% in March).
Meanwhile, consumer prices increased 2.9% in April, following a 2.7% increase in the previous month.
Lastly, harmonized consumer prices were up 0.55% in April on a month-on-month basis, following a 1.16% increase in the previous month.
Panelist insight: Commenting on the outlook, Anatoli Annenkov, analyst at Société Générale, stated:
“Headline inflation should rise further [this year]. A key question relates to how wage growth might react, but with an already relatively tight labour market, trade unions should be able to extract some compensation for higher inflation. The other key concern we have is the demographic trends, implying that labour supply will shrink in the coming years, suggesting that much of the fiscal stimulus could thus leak abroad or into higher wage growth.”