Inflation in Germany rose to its highest rate in nearly 30 years as price pressures continue to build up in Europe’s largest economy.
- Consumer prices increased by 5.3% YoY in December, as the cost of energy rose by 18.3%, followed by goods (+7.8%), food (+6%), and services rose by (+3.1%).
- That figure is an increase from the 5.2% inflation posted in November. Prices increased by 0.5% in December alone.
- The increase in Germany’s inflation rate was attributable to the end of last year’s short-term VAT tax cut, the rise in the oil price, and price increases across supply chains due to the COVID-19 pandemic.
- On an EU-harmonised basis, Germany’s annual inflation rate last month was 5.7%, nearly triple the ECB’s 2% target.
Germany’s government officials and policymakers expect inflation to cool down further in the coming as transitory effects will likely fade away from January onwards.
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Source: Federal Statistical Office
