Verbraucherpreise: Tankrabatt dämpft Inflation - aber noch keine Entwarnung

Tankrabatt has helped ease Germany's consumer prices in October, with the inflation rate dropping to 2.8% from 3.3% in September, according to the Federal Statistical Office using provisional data. Commerzbank chief economist Jörg Krämer attributed the drop largely to the fuel rebate. However, early relief from inflation seems premature, as rising energy prices are expected to gradually increase the cost of other goods and services.

In October, German consumers paid 12.2% more for fuel and household energy compared to the previous year, though the pace of price increases slowed after nearly 15% in the prior month. Food prices also rose 0.4% in October compared to last year, while services, including travel and dining out, increased by 2.5%, again less than in recent months.

Michael Heise, chief economist at asset manager HQ Trust, said the drop in inflation was stronger than expected, but consumers are not likely to rejoice as the cost of living remains very high at 2.8%. Despite the rebate, fuel is still significantly more expensive than a year ago, as is overall energy consumption. Economists expect inflation to remain elevated for now, with the conflict between the US and Iran driving energy prices since late February remaining unresolved.

The Bundesbank's monthly report states that energy price hikes are expected to remain high through October to December. Rising inflation will weigh on people's purchasing power: for every euro, they will be able to afford less. A new fuel rebate was introduced by the German government this year despite criticism from many experts.

From October 1st to the end of 2026, the energy tax on gasoline and diesel will be reduced by about 14 cents per liter, with the value-added tax adding up to a possible 17 cents per liter relief. Rising inflation has been stressing people's purchasing power for months, not just in Germany. In the largest economy in Europe, the inflation rate rose to its highest level since December 2023 in September, reaching the highest level in three years at 3.8% in the Eurozone.

The European Central Bank (ECB) aims for 2.0% inflation over the medium term in the Eurozone, which it considers its main goal of maintaining a stable euro and preserving people's purchasing power. In order to curb price increases, the ECB has already raised interest rates twice this year. "If the situation does not change, the ECB is likely to raise interest rates again in December," said Stephanie Schoenwald, an economist at KfW Research.

The ECB estimates that inflation in the Eurozone will need to remain high until at least 2027. Germany's leading economic research institutes also expect the price increase to rise from 2.8% this year to 3.2% in 2027.