Inflation slowed in several major German states in October, according to preliminary data released on Friday, raising expectations that the country’s national inflation rate could also decline.
Bavaria recorded a drop to 2.8% from 3.2% in September, while North Rhine-Westphalia saw inflation fall to 2.7% from 3.3%. In Lower Saxony, the rate declined to 2.9% from 3.3%, while Baden-Wuerttemberg recorded a 0.3 percentage point decrease to 2.6%. Saxony’s inflation rate remained unchanged at 2.8%.
Despite the regional declines, rising energy prices continue to threaten Germany’s inflation outlook. The war in Iran has driven up energy costs in recent months, raising concerns about its impact on consumers and the wider economy.
The German government expects inflation to reach 2.7% this year before rising to 3.0% in 2027.
Economists surveyed by Reuters forecast that Germany’s harmonised inflation rate will ease to 3.1% in October, down from 3.3% in September. The national figures are expected later on Friday.
Attention will then turn to the euro zone, where inflation is projected to increase to 3.9% in October from 3.8% in September, according to economists polled by Reuters. The bloc’s figures are due on Wednesday.
Meanwhile, the European Central Bank left interest rates unchanged on Thursday but signalled the possibility of another increase in December, citing the inflation risks posed by high and rising energy costs.
Goodness Anunobi
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