Economic Briefing/Economic Insights

Germany – Gasoline rebate pushes inflation rate down

The German inflation rate (national definition) fell significantly in October, from 3.3% to 2.8%. This is partly due to lower energy prices. Fuel prices have dropped noticeably as a result of the temporary reduction in the energy tax levied on them. However, the core inflation rate excluding energy and food is also likely to have declined in October from 2.4% to 2.1%. This trend is unlikely to prove sustainable, however. Instead, the inflation rate is expected to rise again soon.