Consumer price growth in Germany has been “pleasant” for several months now. However, the prices of individual goods from different spheres of life are moving against the current inflationary trend. What is getting cheaper now and why?
Coffee prices fall
In February, the discounter Aldi announced a change in the price of coffee. The prices of own brands Morena, Markus Kaffee, Amaroy and Tizio have been permanently reduced by up to 20% in more than 4,000 branches. A 500 gram package could already be purchased for one euro. Soon other dealers joined in this action.
The reason: Since the fall, coffee prices on the world market have fallen considerably. In turn, this is due to the fact that production has stabilized again after two years of drought, frost and extreme rainfall in Brazil – the main supplier of coffee to the world market.
Fall in butter prices
Butter in Germany has also lost a lot of value. More recently, in early March, prices have come down, with many retailers charging as little as €1.49 for the cheapest 250 gram packet of branded butter. For comparison: at the peak of the price wave in May 2022, such a pack cost 2.29 euros.
Reason: The old contracts expired at the end of January and in the new contracts the dealers were able to negotiate significantly lower purchase prices, which made the current price reductions possible.
Cheaper to refuel
After several weeks of fluctuations, fuel prices have fallen considerably, according to the ADAC. On March 21, 2023, a liter of super E10 gasoline cost a national average of 1,735 euros. That’s 2.7 cents less than a week ago. Diesel has become cheaper by 2.6 cents to 1.695 euros per litre. According to the ADAC, this is the lowest value since the beginning of the year.
Reason: According to the ADAC, the decline is due to the weakening of the crude oil market.
Real estate prices fall
The other day, the Federal Statistical Office in Wiesbaden announced another event: in the fourth quarter of last year, for the first time in 16 years, the prices of apartments and houses for one or two families dropped significantly. The decline in prices is expected to continue this year as well.
Reason: Experts speak of weaker demand due to higher financing costs and still high inflation. In other words, buying real estate has ceased to be affordable for many people. In any case, due to inflation, people are short of money and banks are more critical of funding. Agents are reporting a drop in property inquiries.
Ultimately, the rise – in the fight against high inflation – of interest rates by the major central banks had an impact on their growth. Interest on ten-year fixed rate loans has quadrupled in one year, from just under 1% to almost 4%. As a result, monthly interest and loan repayments are several hundred euros higher than before.
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