German 2022 inflation a post-war record of 7.9%

German consumers faced the fastest-rising prices, particularly for food and fuel, in the history of the post-war German republic in 2022, official figures released on Tuesday showed. 

“The historically high annual inflation rate was driven above all by the extreme price increases for energy products and groceries since the start of the war in Ukraine,” Ruth Brand, the president Germany’s Federal Statistical Office, more commonly known as Destatis, said. 

Slight end-of-year reduction

However, the rate of inflation dipped markedly in December, to 8.6%, after three consecutive months at 10% or higher. October was the year’s peak, a 10.4% rise compared to the same month in 2021.

Although inflation had been creeping up even before Russia’s invasion of Ukraine, with the 2021 rate in Germany at 3.1%, the war’s effect on consumer prices was all too visible in the monthly figures. 

Having stood at 4.9% in January and 5.1% in February, inflation jumped past 7% in March (the first full month after Russia’s invasion on February 24) and remained at least that high for the remainder of the year. 

The phenomenon of rapidly rising inflation was more or less global in 2022, by no means limited to Germany or Europe, although the EU and Germany’s prior dependence on Russian energy exports did put the region among the worst-affected. 

Destatis’ Brand said that even though price increases “were not passed on to consumers in their entirety, energy and food in particular did become more expensive for them.” 

Politicians hope for inflationary pressures to ease in 2023 but they are also tempering that optimism. 

German Economy Minister Robert Habeck, speaking to die Welt on the sidelines of the World Economic Forum in Davos, said he was hoping for the rate to have dipped to the 5% region by the end of 2023. He warned, however, that the year’s overall figure would most likely be higher.

Western central banks aim for an inflation rate in the region of 2%, and have been steadily increasing interest rates — after around 15 years at unprecedented lows — in a bid to discourage some spending and borrowing. 

As well as rising food and energy prices, supply chain issues and commodity shortages, many of which can be traced to aftereffects of the COVID pandemic, also contributed to the price pressures. 

Energy price rises far exceeded mean increase

Household energy expenditure rose in Germany by 39.1% compared to the previous year, more than four times overall inflation. Heating oil (up 87%) and natural gas (64.8%) climbed most sharply, electricity prices overall rose 20.1%. For drivers, petroleum and diesel prices at the pumps rose by 26.8%. 

Groceries were next in line, albeit much closer to the aggregate levels, with food and drink shopping costing an average of 13.4% more compared to 2021. Eggs, cooking oils and fats, and dairy products rose by above-average levels. 

Inflation tends to affect people on lower incomes most profoundly, particularly when products that everybody needs in roughly equal amounts are rising. 

Destatis said that several government measures had helped reduce pressure on consumers to some degree. It cited the €9 montly local public transport flat fare introduced as a one-off for three months in the summer and efforts to shoulder some of the rising energy costs at the government level in particular. 

msh/wmr (dpa, epd)

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Article source: https://www.dw.com/en/german-2022-inflation-a-post-war-record-of-7-9/a-64421304?maca=en-rss-en-bus-2091-xml-atom