May 16, 2022

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German Inflation: Producer price rises to highest level since 1949

German Inflation: Producer price rises to highest level since 1949

The German Federal Statistics Office said on Wednesday that annual German producer price inflation exceeded 30% in March. This is the highest level since the agency began collecting data 73 years ago.

The biggest culprit? Energy prices, which rose nearly 84% from the same month last year.

“Large increases in natural gas prices were mainly responsible for the high energy prices…which were [up] 144.8% in March 2021,” The Census Bureau said in a statement.

It is one of the first signs of enormity Effect Russia’s invasion of Ukraine Owns on the German economy, The largest in Europe. Producer prices rose about 5% between February and March alone.

Consumers must prepare themselves. Factory gate inflation is fueling retail prices, and shoppers can expect to spend more on everything from furniture to meat, according to Wednesday’s numbers.

German Consumer price inflation at Highest level in 41 years, up 7.3% last month. Energy prices were the main contributor, up nearly 40% from the previous month.
Global energy prices were rising before Russian President Vladimir Putin ordered the invasion. As economies begin to open up from pandemic lockdowns, demand for fuel has soared and total price They shot.
But Western sanctions on Russia’s exports of coal and oil and efforts European Union to reduce consumption its natural gas – led to higher prices Beyond that.
Germany has so far resisted the ban on natural gas, and for good reason. According to the International Energy Agency, the country depends on Russia for about 46% of its consumption. A sudden outage is likely with its largest supplier rationing trigger Serious damage to the energy-intensive manufacturing sector.
Economy Minister Robert Habeck already Germans warned They “would be poorer” as a result of the war.

“It is not possible for this to end without costs to German society, it is unimaginable,” he said last month.

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High prices have rocked a country that has long prided itself on its stable economy, and which still harbors deep-rooted fears of the kind of hyperinflation of the 1920s and 1930s. It is widely believed that he helped the Nazi Party come to power.

The European Central Bank has After raising interest rates To tame soaring prices, unlike its US and UK counterparts, it has resisted calls for when and when it will.

European Central Bank President Christine Lagarde said last week that she needed to keep her options open, given the uncertain outlook for the region’s economy, and emphasized that the bank would not raise the cost of borrowing until after ending its purchases of government bonds at some point in the third quarter.

german manufacturer, Henkel (Henky)On Wednesday, it announced that it would cease operations in Russia. The $25 billion chemical and consumer goods giant said it would continue to pay its 2,500 workers in the country. The detergent manufacturer, Persil, did not say what the financial impact of its exit would be.

Mitchell McCluskey contributed to the report.