Germany's November inflation rate reaches highest level in 2021

“The inflation rate increased for the sixth time in a row and in November reached the highest level recorded in 2021 so far,” said Dr. Georg Thiel, president of the Federal Statistical Office. “A higher inflation rate was last measured nearly 30 years ago. In June 1992 the inflation rate was +5.8 per cent.”

The high inflation rates in the second half of 2021 is due to various reasons, including base effects due to low prices in 2020. The temporary value added tax reduction in the second half of 2020 and especially low prices of mineral oil products a year ago, which reached record lows in November, had an upward effect on the overall inflation rate. In addition to the temporary base effects of the past, crisis-related effects such as delivery bottlenecks and marked price increases at upstream stages in the economic process – which are also reflected in the consumer price index – are becoming stronger.

Prices of goods (total) recorded an above average increase of 7.9 per cent from November 2020 to November 2021. Especially the rise in energy product prices (+22.1 per cent) was markedly higher than overall inflation. The rate of price increase regarding energy was up for the fifth month in a row (October 2021: +18.6 per cent).

Food prices were up 4.5 per cent in November 2021 compared with the same month of the previous year. The year-on-year increases in energy and food prices had a clear upward effect on the inflation rate. Excluding energy prices, the inflation rate would have been +3.4 per cent in November 2021; excluding the prices of both product groups, it would have been +3.3 per cent.

Compared with October 2021, the consumer price index, however, fell by 0.2 per cent in November 2021. A major reason for the decrease was the seasonally lower package holidays prices (-21.6 per cent). However, the prices of energy products were up (+1.8 per cent, including motor fuels: +3.0 per cent). Food prices increased, too (+0.5 per cent).

Fibre2Fashion News Desk (RKS)