consumer prices
Inflation at over 3 percent – many in existential need
Groceries are in a shopping cart. Photo: Fabian Sommer/dpa
© dpa-infocom GmbH
Rapidly rising energy prices are fueling inflation in Germany. Many everyday items have become noticeably more expensive. This poses problems for many households in Germany.
A sharp rise in consumer prices has put a strain on people’s budgets in Germany over the past year. According to a YouGov survey commissioned by Postbank, one in nine Germans can hardly pay for their living expenses.
After a further surge in prices in December, inflation climbed to 3.1 percent on an annual average, according to the Federal Statistical Office. The Wiesbaden authority thus confirmed an initial estimate on Wednesday. A higher rate was last measured in 1993 at 4.5 percent. In the Corona crisis year 2020, annual inflation was 0.5 percent.
Inflation intensified in December. According to the information, consumer prices rose by 5.3 percent compared to the same month last year. The inflation rate measured monthly thus reached the highest level of the past year. The Wiesbaden authority also confirmed an initial estimate here.
Hardly any money left for fixed costs
Of those surveyed by YouGov from households with a monthly net income of less than 2,500 euros, as many as 17 percent stated that they were hardly able to cope with regular expenses due to higher prices.
In the survey, 44 percent of the 2102 respondents were very concerned about the comparatively high inflation rates. Almost as many (43 percent) said they were “somewhat” concerned. “The sharp increase in inflation is causing uncertainty in large parts of the population,” summarized Postbank chief economist Marco Bargel. “Since food, energy and fuel have become significantly more expensive, but incomes cannot keep up with price developments, financial leeway is shrinking.”
Energy prices are rising rapidly
Inflation in Europe’s largest economy last year was fueled primarily by soaring energy prices as part of the global economic recovery after the Corona crisis in 2020. According to the information, energy products rose by 10.4 percent compared to the previous year, after a decline of 4 8 percent in 2020. Consumers had to dig deeper into their pockets than the average for the previous year, especially for heating oil (41.8 percent) and fuel (22.6 percent).
In addition, there was the reversal of the temporary reduction in VAT, supply bottlenecks and the introduction of the CO2 tax at the beginning of 2021 of 25 euros per ton of carbon dioxide that is produced when diesel, petrol, heating oil and natural gas are burned.
Even if the VAT effect does not apply this year, economists do not expect a quick relaxation for the time being. Many economists are also assuming a three before the decimal point in the annual inflation rate for this year. Among other things, they refer to supply bottlenecks that increase production costs. The price curve for crude oil has also recently continued to rise steeply.