Two German flags fly in front of sunset and on the Reichstag building.
Photo by Hannes P Albert/Picture Alliance about Getty Images
In April, the German consumer fuel was 2.2% annually and was easy to do after March level, showed on Wednesday before the expectations mentioned above.
Economists surveyed by Reuters had appreciated a 2.1% reading. The country's consumer price index, which was harmonized for comparability in the euro zone, had entered 2.3% annually in March.
The so-called core inflation, which excludes food and energy prices, accelerated from 2.6% in March to 2.9% in April. The densely respected service pressure also rose to 3.9% after reading 3.5% in the previous month.
The energy prices now decreased sharply and, according to the statistics office, fell by 5.4%.
At first glance, the inflation rate, which decides in the 2% mark of the European Central Bank, is a good news for consumers, there are some less positive points about the data that looks more closely, said Sebastian Becker, economist of Deutsche Bank, in a Wednesday.
The slight decrease in the number of headlines occurred only due to lower energy and food costs, he said. “In comparison, the core inflation rate, which is more important for the ECB, is in particular.” The inflation of the services “appears to be significantly more disturbing than expected,” added Becker.
Economic growth
On Wednesday, preliminary data showed that the Germany economy changed 0.2% in the first quarter compared to the previous three -month period.
The illustration published by the German Statistics Office is adapted for price, calendar and seasonal variations.
The gross domestic product species agreed with the estimates of economists surveyed by Reuters. The gross domestic in Germany had 0.2% in the fourth quarter.
The statistics office attributed the quarterly increase to the fact that both the final consumption expenditure of the household and capital formation were higher than in the previous quarter.
While the recognition of the numbers on Wednesday was positive, “the quarterly increase is still much too small to end the long -lasting stagnation of the country,” said Carsten Brzeski, Global Head of Makro at Ing, in a note.
The largest economy in Europe has long been sluggish, since its GDP flip between growth and contraction has previously avoided the technical recession every quarter during 2023 and 2024, which is defined by two consecutive quarters of contraction.
Important industry and cars suffer from a stronger competition from China. Other industries, including house construction and infrastructure, also go through strenuous times that are associated with higher costs, subdued investments and bureaucratic hurdles.
Regardless of this, US President Donald Trump's collective bargaining policy has uncertainty on export reliant Germany, which the United States is considered the most important trading partner.
As part of the European Union, Germany is exposed to 20% flat -rate tariffs for goods exported to the USA, although these taxes have been temporarily reduced to 10% to ensure time negotiations. US obligations on steel, aluminum and cars also affect the country.
The German government reduced its economic prospects to predict stagnation in 2025 last week. The outgoing Minister of Economic Affairs Robert Habeck said that Trump's trade policy and her effects on the country are the main factor for the revision.
Household goods
A bright spot could appear on the horizon. Germany at the beginning of this year was the longstanding fiscal government of the long-term debt brake, enabled higher defense spending and the creation of a euro fund of 500 billion euros ($ 570 billion), which is devoted to infrastructure and climate investments.
This step was widely regarded as a positive shift for the German economy, although a lot still depends on how the changes are implemented.
“Today's GDP report draws a picture of what could have happened if it hadn't been for the tariff explosion of US President Donald Trump -an economy that goes through a weak cyclical rebound, but was able to gain dynamics with the announced control stimulus,” said Brzeski from Ing.
While this recovery could still occur, the process will probably take longer, the analyst said. He emphasized that tariffs, uncertainties and other changes in trade and geopolitics weigh up short -term economic prospects, while the planned fiscal measures can increase long -term growth.
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