Inflation rate in Germany hits 50-year high
The inflation rate in Germany has hit a 50-year high of 7,9 percent, according to new figures from the Federal Statistical Office (Destatis).
Prices of goods and services rise once again
Huge price increases for energy and food have pushed inflation in Germany to its highest level since the oil crisis more than 50 years ago. As Destatis reported on Tuesday, in May, consumer prices in Germany rose by 7,9 percent compared to the previous month.
This means that inflation in Germany has remained above the 7-percent mark for three months in a row, having first risen to a historic high at the end of March 2022, before rising once again in April. Between April and May 2022, prices have risen by 0,9 percent.
“The main reason for the high inflation is still prices increase for energy products,” said Destatis President Georg Thiel. “But we’re also seeing price increases for many other commodities, especially food.” Over the past year, energy prices have risen more than 38 percent, while food prices have risen 11,1 percent. However, even if energy and food prices are excluded from the figures, the inflation rate in May was still as much as 3,8 percent.
Inflation rate highest ever recorded in reunified Germany
The inflation rate is therefore the highest ever recorded in reunified Germany. To find similarly high figures, you’d need to look back to the western federal states during the winter of 1973 / 1974, when the first oil crisis caused oil prices to skyrocket.
The current price rises are being fuelled by a variety of factors, including uncertainty in the market following the Russian invasion of Ukraine, as well as interrupted supply chains and delivery bottlenecks in the aftermath of the coronavirus pandemic.
And a price drop isn’t currently looking likely. The Bundesbank expects inflation to average out at 7,1 percent this year, a significant increase on its 3,6-percent prediction in December 2021. Federal Agriculture Minister Cem Özdemir has said he expects food prices to continue to increase, and is planning to reduce VAT on certain items to help relieve consumers.
The price increases are hitting consumers hard across the country. According to a recent Insa survey, one in six people in Germany is currently regularly skipping meals, and a further 17 percent are considering doing so if prices continue to rise.