Inflation in Germany reaches highest level in almost 50 years

Xinhua – Inflation in Germany in May reached the highest level in almost 50 years with consumer prices rising 7.9 percent year-on-year, the Federal Statistical Office (Destatis) said on Tuesday. A similarly high rate in Germany was last recorded in the winter of 1973/1974 when mineral oil prices had sharply increased due to the first oil crisis, according to Destatis. Inflation in Europe’s largest economy has been at record levels for months in almost all sectors. Soaring energy prices driven by the Russia-Ukraine conflict had a “substantial impact on the inflation rate,” Destatis noted. Prices of energy products were up 38.3 percent. Costs for heating oil almost doubled, while natural gas and motor fuel prices soared by 55.2 percent and 41 percent, respectively, according to Destatis. Germany’s government adopted several measures to cushion the effects of rising energy prices, including a fuel tax cut, a higher mileage allowance for long-distance commuters, a discount ticket for public transport, and a one-off energy allowance of 300 euros (314 US dollars). Delivery bottlenecks due to interruptions in supply chains caused by the COVID-19 pandemic were additionally affecting inflation, Destatis noted. More than three out of four German companies complained of bottlenecks or problems in the procurement of intermediate products and raw materials in May, according to the Munich-based ifo Institute. “Supply chains are under constant strain,” said Klaus Wohlrabe, head of ifo surveys. Food prices in Germany also outgrew inflation, rising at 11.1 percent. Prices of edible fats and oils increased particularly sharply by 38.7 percent, according to Destatis. Minister of Agriculture Cem Oezdemir expects food prices to continue to rise. “We have to expect increases in the fall and winter because retailers now have to stock up on expensive energy and the price increases are passed on to customers,” he told the Rheinische Post. This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources. Khmer Daily