German inflation hits record 7.9% in August: Destatis

BERLIN, Aug. 30 (Xinhua) — After two months of decline, inflation in Germany is expected to hit a record high of 7.9 percent in August, according to preliminary figures released by the Federal Statistical Office (Destatis) on Tuesday. .

Since the beginning of the Russian-Ukrainian conflict, energy prices have particularly increased and continue to have a “substantial impact on the high rate of inflation”, noted Destatis. Energy prices rose 35.6% year-on-year.

Food prices have risen more than twice as fast as headline inflation. Sharp price increases at upstream economic stages as well as supply chain disruptions related to COVID-19 have had an “upside effect” on consumer prices, according to Destatis.

High inflation is more than offsetting wage increases in Europe’s biggest economy. Although the nominal wage index in the second quarter rose 2.9% year-on-year, real wages fell 4.4%.

To cushion the effects of high inflation, the German government has implemented relief programs totaling 30 billion euros (30 billion US dollars). Measures such as the 9 euro public transport ticket or the fuel discount expire in September, and successors are currently being considered.

The end of the temporary relief measures “further delays the downward trend in the inflation rate”, said Fritzi Koehler-Geib, head of research at the country’s KfW development bank.

The bank expects annual inflation in Germany to peak at 8.4% in 2022 before falling to 5.1% in 2023. No normalization is expected before 2024.

Chancellor Olaf Scholz promised that new relief measures would be introduced quickly. Citizens would be supported so that they could “deal with rising prices, with inflation, so that no one is left alone with their problems”. (1 euro = 1 US dollar)

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