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Energy prices are driving inflation to their highest level since 2011 - and there is no end in sight for the time being

2021-06-17T21:41:57.133Z

Inflation in Germany currently only goes one way: up. Consumers feel the rising prices especially at the petrol pump and when ordering heating oil.



Inflation in Germany currently only goes one way: up.

Consumers feel the rising prices especially at the petrol pump and when ordering heating oil.

Wiesbaden - At 2.5 percent, inflation in Germany has reached its highest level in almost ten years - and consumers will have to be prepared for price jumps in the coming months as well.

Economists * anticipate that inflation will continue to rise in the current year, the Bundesbank considers temporarily inflation rates of four percent possible.

In May, rising energy prices in particular fueled inflation, as the Federal Statistical Office confirmed on Tuesday.

According to calculations by the Wiesbaden authority, energy rose by 10 percent within a year.

Rising inflation: Higher oil prices and the CO2 levy drive inflation

One reason for this above-average increase is a so-called base effect: A year ago, with the outbreak of the Corona crisis, crude oil prices fell temporarily due to low demand on the world market.

They have since recovered.

In addition, since January 25 euros have been levied in Germany per tonne of carbon dioxide (CO2) that is produced when diesel, petrol, heating oil and natural gas are burned.

That drives up the prices for heating and refueling.

For heating oil (plus 35.4 percent) and fuels (plus 27.5 percent), consumers had to dig much deeper into their pockets in May of the current year than a year earlier.

According to an evaluation by the Check24 booking portal, the prices for electricity, gas and heating oil rose in some cases sharply in the first half of 2021.

For electricity, for example, a family with an annual consumption of 5,000 kilowatt hours pays an average of 1,524 euros - and thus more than ever before in the period under review since 2007. Measured against an order of 2,000 liters, heating oil has increased by 65 since the low in September (770 euros) Percent more expensive.

Rising inflation: VAT effect catches up with consumers

Without taking energy prices into account, according to calculations by the Wiesbaden statisticians, the inflation rate would have been 1.8 percent in May 2021, without heating oil and fuels even only 1.6 percent.

Instead, inflation in Germany has risen steadily since the beginning of the current year after temporarily negative inflation rates in the second half of 2020.

A second price driver: the VAT, which was lowered for half a year in the Corona crisis, has been back to its old level since January.

In March the inflation rate was 1.7 percent, in April it was already 2.0 percent, in May it was 2.5 percent, as the Federal Office had already calculated at the end of May on the basis of preliminary data.

The annual rate of inflation in Europe's largest economy was last so high in September 2011. From April to May 2021 consumer prices rose by 0.5 percent, according to the information.

The harmonized consumer price index HICP, which the European Central Bank (ECB) uses for its monetary policy, was 2.4 percent above the level of the same month last year in May and 0.3 percent above the level of April 2021.

Inflation: ECB is aiming for an inflation rate of two percent in the medium term

In the medium term, the ECB is aiming for an annual rate of inflation of just under 2.0 percent for the entire euro area - far enough away from zero.

Because permanently low prices are seen as a risk to the economy: companies and consumers could then postpone investments - in the hope that it will soon become even cheaper.

In its latest forecast, the ECB assumes that it will come very close to its inflation target in the current year: The monetary authorities expect inflation in the 19 euro countries to rise by 1.9 percent.

In the coming year, according to the central bank, the price pressure should then ease again, the ECB expects an annual price increase of 1.5 percent in 2022.

Inflation rate: Bundesbank expects easing for 2022

In Germany, special effects such as the CO2 levy and the return of VAT to its old rate will have less impact in the coming year, according to the Bundesbank. Accordingly, inflation in this country should then move at 1.8 percent.

(dpa / utz) * Merkur.de is part of IPPEN.MEDIA.

Source: merkur

All news articles on 2021-06-17

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