So far, the highest annual inflation rate in the history of the Federal Republic was, according to the statistics office, in 1951, when it reached 7.6% in what was then West Germany. Inflation was also above seven percent, 7.1 percent to be precise, in 1973. It hasn’t crossed the seven percent mark since then, but in the meantime even statisticians have changed the calculation methodology.
Inflation in Germany reached its peak last October, when it was 10.4%. It slowed to 10% in November and reached 8.6% in December. Economists had expected inflation to return to single digits, and Federal Finance Minister Christian Lindner also spoke of mild optimism in December.
At the time, analysts said that the government’s measures, which took over the December payments for natural gas and district heating in favor of households and small businesses, would have contributed to the slowdown in the growth of consumer prices. According to economists, regulated prices for electricity, gas and heat, which the government will subsidize until spring 2024, will also help reduce inflation.
The high inflation is mainly due to energy prices, which increased by 24.4% year on year in December. For comparison, energy prices increased by 38.7% year-on-year in November and by as much as 43% in October. Food prices are also significantly more expensive, with prices rising 20.7% year-on-year in December. In November it was 21.1%.
For this year, the German government expects inflation to be seven percent. However, the economic institute Ifo is significantly more optimistic, forecasting average inflation for this year at 6.4%.
Inflation in Turkey has fallen sharply, but is still over 64%.
Economic
