German Economy Minister Robert Habeck said that consumer inflation in the country is likely to remain high at the beginning of the year, but then it will begin to show a downward trend.
Inflation in Germany slowed down at the end of the year, but reached a record high in 2022. The rise in energy and food prices has led to an increase in inflation to 7.9% on average for the year. In December, the upward trend in prices weakened, especially because the government assumed one-time expenses for advance payments of gas and district heating consumers. Consumer prices rose by 8.6% per annum compared with an increase of 10.4% per annum in November. On a monthly basis, the consumer price index fell by 0.8% in December. According to economists, inflation is likely to gain momentum again after the termination of the one-time benefit. Starting in March, the slowdown in gas and electricity prices may weaken inflation again. In general, economists do not expect a significant overall weakening of consumer prices in 2023.
According to government forecasts, inflation will fall to 6% in 2023 after reaching 7.9% in 2022. The German economy minister also said that next year inflation will be lower than in 2023, and economic growth will be higher. GDP is projected to grow by 0.2% this year.