The inflation rate is expected to continue to rise.
The corona crisis is primarily to blame - economists still give consumers hope.
Wiesbaden - For Germany's consumers * it will be even more expensive.
In August, the inflation rate in Europe's largest economy, at 3.9 percent, scratched the four percent mark for the first time in almost 30 years.
From July to August 2021, the level of consumer prices stagnated, as the Federal Statistical Office * announced on Monday based on preliminary calculations.
The current price increase is approaching the record level.
The Wiesbaden statisticians last determined a higher value for the annual rate of inflation for December 1993 at 4.3 percent at the time.
In June 2021 the rate was still 2.3 percent, in July the price level jumped to 3.8 percent.
Inflation: Energy and food prices are fueling inflation
For months, inflation has been fueled by above-average increases in energy prices.
While food prices rose by 4.6 percent year-on-year in August, consumers * had to pay 12.6 percent more for heating and refueling than a year earlier, according to calculations by the Federal Office.
A year ago, with the outbreak of the Corona crisis *, crude oil prices collapsed due to low demand on the world market.
They have since recovered.
In addition: In Germany, 25 euros per tonne of carbon dioxide (CO2) has been due since January, which is produced when diesel, gasoline, heating oil and natural gas are burned.
Both are currently causing energy prices to rise.
Inflation: Regular VAT rates drive prices up
In addition, the withdrawal of the temporary VAT reduction is now fully effective.
In order to stimulate consumption in the Corona crisis, the federal government had temporarily reduced VAT from July 1, 2020 to December 31, 2020.
The regular VAT rates have been in effect again since January 2021, so goods and services tend to be expensive.
"Without the special effects of the VAT increase, energy prices and the unusual summer weather, inflation would currently be around 2 percent", calculated Sebastian Dullien, scientific director of the union-related Institute for Macroeconomics and Business Cycle Research (IMK) of the Hans Böckler Foundation.
“In addition, there are currently delivery difficulties for intermediate products, which are also driving up inflation a little.” This top economist explains in
an interview with
Merkur.de
what effects delivery bottlenecks have on the inflation rate
.
Inflation: "Return to inflation rates below two percent by no means certain"
Economists anticipate that consumer prices in Germany will continue to rise in the next few months. For the time being, inflation rates of around five percent are considered possible. “Inflationary pressure will remain very high in Germany until at least the end of the year. Only in January 2022 will the increase in VAT at the beginning of the previous year drop out of the statistics and provide temporary calming, "explained ZEW economist Friedrich Heinemann. "But even after that, a return to moderate inflation rates below two percent is by no means certain."
Many consumers see it that way too: In a survey commissioned by the German Institute for Retirement Provision (DIA), the majority of the more than 2000 respondents assume that inflation in Germany will remain as high in the coming years as it is now (33 percent ) or even to over five percent (31 percent).
Inflation: prices rise faster than wages rise
The European Central Bank (ECB) *, for which stable prices in the euro area of the 19 countries are the main goal, has already gained more flexibility in dealing with comparatively high inflation rates with its new strategy: The central bank is now aiming for an annual rate of inflation for the currency area two percent and is at least temporarily ready to accept a moderate overshoot or undershoot of this mark.
According to preliminary figures from the Federal Statistical Office, the harmonized consumer price index HICP, which the ECB uses for its monetary policy, was 3.4 percent above the level of the same month last year and 0.1 percent above the level of July 2021 in Germany.
Rising inflation rates are bitter for savers * who park money, for example, in low-interest overnight money accounts. The bottom line is that your balances lose their value. In view of the reluctance in many industries due to the ongoing corona pandemic, wage increases that could cushion this effect are not in sight. On the contrary: In the second quarter of 2021, according to calculations by the Federal Statistical Office including special payments, the earnings of collective bargaining employees in Germany increased by 1.9 percent compared to the same period of the previous year. Consumer prices rose by 2.4 percent in the same period, resulting in real wage losses for employees.
(dpa) Merkur.de is part of IPPEN-MEDIA
