Germany: Harmonized inflation rises in March
April 15, 2021
Harmonized consumer prices rose 0.5% month-on-month in March, down from February’s 0.6% increase. The print reflected a drop in prices for communication; and furniture, lighting equipment, appliances and other household equipment.
Harmonized inflation rose to 2.0% in March from 1.6% in February. Higher energy prices and the removal of the temporary VAT reduction at the start of the year have seen inflationary forces pick up. In addition, certain goods and services are unavailable due to lockdown measures, resulting imputed prices, distorting the figure.
Commenting on the outlook, Carsten Brzeski, global head of macro at ING, commented:
“With supply chain disruptions, like higher container prices, delivery problems with semiconductors and most prominently, the recent problems in the Suez Canal, producer prices are set to increase further, possibly putting more pressure on consumer prices. Add to this a post-lockdown reflation in some sectors and the reversal of the German VAT rate and for German (and eurozone) inflation, the only way is up.”