Inflation in Germany exceeds 4% for the first time since 1993
Inflation in Germany rose 4.1% year-on-year in September 2021, the first time it broke the 4% mark in nearly 28 years.
Inflation in Germany hits its highest level in 28 years
Inflation in Germany exceeded 4 percent for the first time since 1993 in September, according to new figures from the Federal Statistical Office (Destatis). When inflation rises, the purchasing power of consumers weakens and the value of savings falls – essentially because a euro buys you less than before.
Inflation has been fueled for months by the rising cost of energy, with increased demand for crude oil in the wake of the coronavirus pandemic driving prices up. Supply bottlenecks and the removal of the temporary VAT reduction have also had an impact, with the prices of goods and services rising steadily.
Data shows that energy and food prices have been hit the hardest by inflation. In Bavaria, for example, the price of fuel oil has become more expensive by 78.5%, while the price of gasoline has increased by 28.4%. Vegetables were 8.4 percent more expensive in September than in August, and meat 4.7 percent more expensive. Rents increased on average by 1.7%.
Economists believe post-corona recovery is causing temporary failure
Economists expect consumer prices to continue rising in Germany in the coming months. According to the Deutsche Bundesbank, inflation could reach 5% by the end of the year, before remaining around 2% until mid-2022.
However, the European Central Bank (ECB) has indicated that it considers this to be a temporary phenomenon, triggered by the restart of the global economy following the pandemic. Christine Lagarde, President of the ECB, said the currently high inflation rates were due to temporary factors and warned people not to “overreact”.