German inflation nears 8% in August
August 30, 2022
Inflation in Germany climbed again in August, the Federal Statistical Office announced on Tuesday, after dipping slightly in June and July due to short-term government programs to reduce the consumer burden in the transport sector.
"At 7.9%, inflation in August narrowly missed a new 70-year high. But the gas levy and the end of the fuel rebate and the €9 ticket are likely to push inflation to inflation to 10% by the end of the year," Jörg Krämer, chief economist at Commerzbank, one of the country's leading financial institutions, told Reuters news agency.
The increase was even more than economists anticipated. After falling from 7.9% in May to 7.5% by July, experts had expected a rate of 7.8% for August.
Energy, food see highest increases
The biggest uptick in prices has been seen in the energy sector. Russia's invasion of Ukraine and the subsequent sanctions against Moscow prompted a race against the clock in Germany to reduce its dependence on Russian gas before the winter. And although it had made significant strides in that direction, energy cost 35.6% more in August 2022 than it did in the same month the year before.
Another sector that has experienced particularly soaring inflation in Germany is the price of groceries, which was at 12% in June before reaching 16.6% in August.
According to the Bundesbank, Germany's central bank, there are plans to increase the minimum wage and lower gas taxes in the fall in order to help German residents weather the financial storm. Economists are also speculating that the European Central Bank is likely to increase interest rates to combat the crisis being felt across the eurozone.
Despite fears to the contrary, however, Germany has not yet entered a recession.
es/nm (Reuters, dpa)
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