Germany’s inflation rate has reached 10 percent. Especially the energy and food prices are still increasing substantially. The Federal Republic has not been in this situation in many decades.
Berlin, September 30th, 2022 (The Berlin Spectator) — Since the 1950s, the Federal Republic of Germany has not registered two-digit inflation rates, until now. Everything is getting more expensive. Consumers are asking themselves whether and when this trend will end. With 7.9 percent, the inflation rate in August was extremely high already. In September, it increased to 10 percent, according to the Federal Office of Statistics.
A few smaller European Union member states had registered inflation rates of this kind before, including Estonia, Latvia and Lithuania. More recently, the Netherlands reported a rate of price increases at this level. Hardly anyone would have believed that Germany would follow this quickly.
Comparing today’s prices to the ones that applied a year ago, in September of 2021, shows how bad the situation is. Since, the price for fuel increased by more than 27 percent, and that for energy in general by more than 57 percent. Right now, the oil price is a little lower than it was a few weeks ago. Still, the gasoline prices are hard to digest, and the artificial price decrease the German government invested billions into in summer obviously does not apply anymore.
Pasta and Vegetables
Supermarket visits are not enjoyable anymore either. The prices for milk products have increased by 60 percent in the past twelve months. Many other kinds of food are about 50 percent more expensive, including pasta and vegetables. This means a family the members of which spent 40 Euro on food per day in the fall of last year will be charged more than 60 Euro today.
Companies are forced to pass on price increases they are affected by to the consumers. The producer prices just saw the strongest increase since the Federal Republic of Germany was founded in 1949. They rose by 45.8 percent, which is almost incredible.
In October, prices will likely increase further, also because cooler temperatures will force people to heat their homes. The government’s energy price cap will help to some extent. First, it has to be put in place. Still, price hikes are inevitable, especially for items that require natural gas during the production process. They include bread, but also paper. For next year, the European Central Bank expects decreasing inflation rates in 2023. There are experts who disagree.