Inflation in Germany reaches 40-year high at 7,4 percent
With prices for food and energy rising virtually unchecked, inflation in Germany has reached heights not seen since the autumn of 1981. Further price hikes are still on the horizon.
Inflation in Germany reaches new high for second month in a row
Inflation in Germany rose to its highest level in 40 years in April, as the war in Ukraine further propelled rising prices for energy and food in particular. According to an announcement from the Federal Statistical Office (Destatis), in April 2022 goods and services in Germany cost an average of 7,4 percent more than a year earlier. This is the highest rate seen since the autumn of 1981, when oil prices skyrocketed as a result of the First Gulf War.
“The inflation rate reached a new high in reunified Germany for the second month in a row,” said Georg Thiel, President of Destatis. In March, a 40-year high inflation rate of 7,3 percent was reached.
Current prognoses suggest that further price rises are still to come. According to a survey by the Ifo Institute, based in Munich, a substantial majority of local and international companies in Germany are planning to raise their prices within the next three months. Ifo economic chief Timo Wollmerhäuser therefore concluded that the inflation rate was unlikely to fall below 7 percent anytime in the coming months.
Price of energy and food rising particularly rapidly
The war in Ukraine continues to be the primary driver of the rapid price increases, with the cost of energy and raw materials rising particularly sharply. In April 2022, energy cost 35,3 percent more than a year before, with the price of light heating oil rising by nearly 100 percent, and electricity by 19,3 percent.
Food is also becoming noticeably more expensive, with the statisticians noting that the “effects of the Ukraine war are becoming increasingly visible” in this area. Edible fats and oils (prices up 27,3 percent), meat products (+11,8 percent), dairy products and eggs (+9,4 percent) and fresh vegetables (+9,3 percent) are among the worst affected products.
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