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May German inflation at 7.9%; very high for 3rd month in row post 1990

16 Jun '22
2 min read
Pic: Shutterstock
Pic: Shutterstock

The consumer price index (CPI)-based inflation rate in Germany was 7.9 per cent in May this year—an all-time high for the third month in a row since German reunification. The Federal Statistical Office (Destatis) attributed the high inflation primarily to price rise for energy products. But it also sees price increases for many other goods, especially food.

“A similarly high inflation rate was last recorded in the former territory of the Federal Republic in winter 1973/1974 when mineral oil prices had sharply increased as a consequence of the first oil crisis”, Destatis president Georg Thiel said in a release.

In March 2022, the inflation rate had stood at 7.3 per cent and in April this year at 7.4 per cent. Consumer prices in May this year were up by 0.9 per cent over April.

The increase in energy prices observed already before the war in Ukraine has markedly accelerated since the war started and it has a substantial impact on the inflation rate, Destatis noted.

Additional factors are delivery bottlenecks due to interruptions in supply chains, also caused by the COVID-19 pandemic, and marked price increases at upstream stages in the economic process.

Price increases accelerated for consumers not only regarding energy products but also other products, such as many food products again, as a consequence of the situation of war and crisis.

Energy product prices in May this year were 38.3 per cent higher than in the same month a year earlier, following a 35.3 per cent increase in April 2022.

Natural gas prices (55.2 per cent rise) and motor fuel prices (41 per cent rise) increased considerably. The price rises for the other energy products were markedly above the overall inflation rate, too, for example the prices of solid fuels (33.4 per cent rise) and of electricity (21.5 per cent).

The price increase for energy products was due to several factors. In addition to the war- and crisis-related effects, the increase in the carbon dioxide charge from €25 to €30 per tonne of carbon dioxide, that became effective at the beginning of the year, had an impact in Germany.

The prices of goods were up by 13.6 per cent in May 2022 year on year. The prices of non-durable consumer goods, also referred to as convenience goods, increased markedly by 17.9 per cent. Prices of durable consumer goods were up 5.5 per cent on the same month of the previous year.

Fibre2Fashion News Desk (DS)

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