Status: 10/28/2021 3:06 p.m.
Consumer prices in Germany rose by 4.5 percent in October compared to the same month last year. It is the highest rate of inflation in 28 years. Once again, energy costs turned out to be the biggest price driver.
The inflation rate in Germany has risen further in the current month. In October 2021, according to a preliminary estimate by the Federal Statistical Office, consumer prices will be 4.5 percent higher than in October of the previous year. Compared to September, consumer prices rose by 0.5 percent.
The statisticians last recorded an inflation rate of 4.5 percent in October 1993. In September inflation, at 4.1 percent, exceeded the four percent mark for the first time in many years. Experts expect inflation to rise to around five percent by the end of the year.
Energy is the biggest price driver
The biggest price driver in the current month was again energy: In October it cost 18.6 percent more than a year earlier. Food prices rose by 4.4 percent, services by 2.4 percent, including housing rents by 1.4 percent.
“The high inflation rates since July 2021 have a number of reasons, including base effects from low prices in 2020,” said the statement from the Federal Statistical Office. In particular, the temporary reduction in VAT rates between July and December 2020 and the drop in the price of mineral oil products increased overall inflation, according to the statisticians.
Consequences of the corona crisis
According to the authority, in addition to the usual market developments, the introduction of CO2 pricing since January 2021 and crisis-related effects. These include the significant price increases on the upstream economic levels, which are initially only partially reflected in the consumer price index and the inflation rate to a lesser extent.
“The further rise in energy prices that is becoming apparent is likely to cause the inflation rate to rise again sharply in November,” commented Commerzbank expert Marco Wagner. “From the beginning of next year, however, the inflation rate should be significantly lower again and weaken further over the course of the year.”