Status: 04/28/2022 2:25 p.m
The inflation rate in Germany rose surprisingly sharply in April due to the Ukraine war and rising energy prices. The 7.4 percent increase is the highest level since the fall of 1981.
The inflation rate in Germany continued to rise from a high level in April. Consumer prices were 7.4 percent above the level of the same month last year, as reported by the Federal Statistical Office based on preliminary calculations. That was the highest level in reunified Germany. In the old federal states, there was a similarly high value last in autumn 1981. Economists surveyed by Reuters had now expected a slight decline to 7.2 percent for April. In March, inflation had already climbed to 7.3 percent, mainly due to rising energy prices.
Relief package approved
The Russian attack on Ukraine at the end of February drove up oil and gas prices, which had been rising for months, and food prices are also rising steeply. Many companies want to increase the prices of their goods because they themselves are affected by rising costs. The development increases the concern among experts that the price surge could last longer than initially assumed. Higher inflation rates reduce the purchasing power of consumers because they can then afford less for one euro.
Relief package from the traffic light coalition against rising energy prices
Daniel Pokraka, ARD Berlin, daily news 5:00 p.m., April 28, 2022
The federal government expects inflation to average 6.1 percent this year – which would be the highest level since 1981. For comparison: last year the rate was 3.1 percent and in 2020 only 0.5 percent. Citizens should be relieved in view of the sharp rise in energy and fuel prices. Among other things, the Bundestag decided to reduce the energy tax on fuel for three months and to provide support for families and low-income earners.
ECB in conflict
The development is also unpleasant for the European Central Bank (ECB). She sees inflation of around two percent as ideal for the economy in the medium term, but is currently in a dilemma. It should actually raise interest rates, but does not want to further weaken the economy in the euro area because of the risk of recession.
7.4 percent inflation in April 2022
Ursula Mayer, HR, 28.4.2022 · 15:18 Uhr