Inflation rate jumps to 7.3 percent in March
Created: 03/30/2022, 14:35
Inflation keeps rising - everything is getting more expensive.
© Marijan Murat/dpa
The war in Ukraine is fueling energy prices.
Inflation in Germany rises to its highest level in decades in March.
A relaxation is not in sight for the time being.
Wiesbaden - A significant jump in energy prices as a result of the Ukraine war drove inflation in Germany to its highest level since reunification in March.
Consumer prices in March 2022 were 7.3 percent higher than in the same month last year, as the Federal Statistical Office announced on Wednesday based on preliminary data.
In February, the annual inflation rate was still 5.1 percent.
The last time the inflation rate in the old federal states was as high as in March was in autumn 1981, when mineral oil prices had also risen significantly as a result of the effects of the First Gulf War.
Since the Russian attack on Ukraine, oil and gas prices have risen sharply, fuel and heating have become drastically more expensive.
According to preliminary statistic data, people in Germany had to spend 39.5 percent more on household energy and fuel in March than in the same month last year.
Food prices increased by 6.2 percent within a year.
Compared to February, consumer prices rose by a total of 2.5 percent in March.
More and more companies are increasing their prices
Economists do not expect prices to relax for the time being.
“The prices for food and industrial goods are also likely to receive an additional boost as a result of the slump in wheat exports from Ukraine and Russia and new supply chain disruptions,” wrote the Deutsche Bundesbank in its monthly report for March.
According to a survey by the Ifo Institute, more and more companies want to increase their prices in the next three months.
According to the economic research institute, price increases are to be expected in the consumer-related area in particular.
Economists are currently expecting an average inflation rate of more than six percent for the year as a whole.
That would be the highest value since German reunification in 1990. In the old federal states, the last time there was a six in front of the decimal point for the inflation rate was 1981, when it was 6.3 percent.
According to the “Economic Wise Men”, people in Europe's largest economy will have to adjust to permanently higher energy prices as a result of the Ukraine war.
Because Germany is becoming less dependent on gas and oil imports from Russia, costs will increase in the long term, said Veronika Grimm from the German government's Economic Advisory Council.
"As a result, energy prices will remain structurally higher than they were before this crisis."
More relief requested
The federal government has now put together a package to relieve people of the increased energy and fuel prices.
The Federation of Consumer Organizations is calling for additional relief if prices continue to rise.
It cannot be ruled out that the price increase for natural gas and, as a result, also for heating oil, petrol, diesel and electricity, but also for other consumer goods, will continue to increase significantly, explained association head Jutta Gurkmann.
more on the subject
Fear of inflation: Ukraine crisis hits German economy
Bundesbank: War is slowing down the upswing and driving up prices
Inflation back above five percent: Further increase is imminent
Higher inflation rates reduce the purchasing power of consumers because they can then afford less for one euro.
This can dampen private consumption and thus slow down the recovery of the German economy after the Corona slump.
The European Central Bank (ECB) is aiming for stable prices overall in the euro area with an annual inflation rate of two percent.
Europe's currency watchdogs recently expected an inflation rate of 5.1 percent for the currency area of the 19 countries in the current year.
dpa