Status: 04/28/2022 14:25
The inflation rate in Germany rose surprisingly sharply in April due to the war in Ukraine and rising energy prices. The 7.4% increase is the highest level since the fall of 1981.
The inflation rate in Germany continued to rise from a high level in April. Consumer prices were 7.4 percent above the level of the same month last year, as reported by the Federal Statistical Office based on preliminary calculations. This was the highest level in reunified Germany. In the former federal states, there was a similarly high figure in the fall of 1981. Economists polled by Reuters now expected a slight decline to 7.2% in April. In March, inflation had already risen to 7.3%, mainly due to rising energy prices.
approved relief package
The Russian attack on Ukraine in late February pushed up oil and gas prices, which had been rising for months, and food prices are also skyrocketing. Many companies want to raise the prices of their products because they themselves are affected by rising costs. The development raises concern among experts that the price rise could last longer than initially anticipated. Higher inflation rates reduce consumers’ purchasing power because they can pay less for one euro.
The federal government expects an average inflation of 6.1 percent this year – which would be the highest level since 1981. For comparison: last year the rate was 3.1% and in 2020 it was just 0.5%. Citizens should feel relieved in the face of the sharp rise in energy and fuel prices. Among other things, the Bundestag decided to reduce the energy tax on fuels for three months and to support families and low-income workers.
ECB in conflict
The development is also unpleasant for the European Central Bank (ECB). She sees inflation of around 2% as ideal for the economy in the medium term, but she is currently in a quandary. In fact, it should raise interest rates, but it doesn’t want to further weaken the eurozone economy because of the risk of recession.
7.4% inflation in April 2022
Ursula Mayer, HR, 04/28/2022 15:18