Berlin, Germany- German inflation has accelerated to a 40-year high of 8.8 percent in the year to August 2022.
Energy prices have risen by 35.6 percent and food prices by 16.6 percent. Core inflation, excluding food and energy, rose to 3.1 percent, up from 2.8 percent in July.
Joachim Nagel, head of German’s Central Bank, warned recently that inflation in the country was this year likely to rise at double-digit levels for the first time since 1951 and predicted prices would rise by at least six percent next year.
German inflation continued to rise despite government action, including lower duty on fuel and energy bills and a subsidized €9 (US$9.02) monthly train ticket. Many of the measures will expire in September, making it likely that inflation will jump even higher.
Meanwhile, Belgium’s Statbel statistics agency has revealed that the country’s inflation jumped to 9.94 percent in August, just short of the 1976 record of 9.96 percent.
“Energy inflation is now running at 49.81 percent, compared to 49.11 percent last month and 55.99 percent in June. Electricity is now 57.2 percent more expensive than a year ago. Natural gas is 106.9 percent more expensive than in August last year. The price of domestic heating oil, calculated based on a smoothed 12-month moving average, has increased by 52.6 percent in one year. Motor fuels are 21.0 percent more expensive than last year,” the agency stated.
Food prices in the country also surged 9.71 percent, but they make up only 1.92 percent of the overall inflation.
Apart from energy, prices on bread and cereals, confectionery, meat, alcohol, personal care products and hotel services have grown the most.
The fallout from Russia’s military operations in Ukraine has sent wholesale gas and electricity prices surging to record levels in Europe in recent weeks and pushed up the cost of fertilizer and other agricultural commodities such as wheat.
Some European Central Bank (ECB) rate-setters worry that the inflationary shock caused by the disruption of the Ukraine war has been accentuated by the demand shock following the reopening of European economies as COVID-19 restrictions were ended earlier this year.
Recent business surveys indicate that supply bottlenecks have been easing for companies for several months, and many are reporting rising inventories of unsold products due to falling orders.
The German inflation figures combined with a jump in Belgian inflation to a 46-year-high of 9.9 percent in August reinforced expectations that overall eurozone price growth is likely to hit a record of at least 9 percent when the data is released on Wednesday.
