Inflation in Germany is at its highest in 29 years

According to the domestic calculation methodology, inflation rose to 5.2 percent. More recently, prices have been pushing up more expensive energy, as well as supply chain problems. However, the statistical office also mentions a low price level in 2020.

According to non-harmonized data, inflation exceeded analysts’ expectations in a Reuters poll. They assumed that inflation would rise to five percent. It was 4.5 percent in October. According to statistics, Germany has not experienced an inflationary value starting at five since 1992, when the country recorded a year-on-year rise in consumer prices of 5.06 percent for the whole year.

According to the EU methodology, November inflation in Germany rose from 4.6 percent in October. The published data are preliminary, the final ones will be issued by the statistical office on 10 December.

Impacts of the pandemic

According to the statistical office, the rapid rise in prices that Germany, like other European countries, has been facing since the summer is due to a number of reasons, including low prices in 2020. “This is mainly due to a temporary reduction in value added tax.”

Environmental charges for carbon dioxide and the effects of the economic crisis caused by the covid-19 pandemic are also contributing to rising prices. The economy continues to face supply chain problems as well as rising energy prices.

Current inflation in Germany is well above the European Central Bank’s (ECB) target, which raised its medium-term inflation target to 2% in July. The target is symmetrical, which means that downward and upward deviations from the target are equally undesirable.

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