Inflation started to rise again in Germany in August. It reached 7.9% in a year, after two months of slowdown, driven by the increase in energy prices, in a context of war in Ukraine, according to final figures published on Tuesday.
The price index gained 0.4 point year-on-year compared to July, returning to its May level, statistics institute Destatis said in a statement. In one month, the indicator gained 0.3%. The harmonized price index, which serves as a reference for the European Central Bank, rose 8.8%.
In detail, prices in Germany continue to be buoyed by the ongoing explosion in energy prices, caused by the war in Ukraine, by 35.6% year-on-year in August, compared to 35.7% in July and 38 .0% of June. Food prices also continue to rise, due to the effect of the war and droughts, to 16.6% in August, after 14.8% in July. The prices of goods rose, for their part, by 14.7%, 0.8 points more than in July, in a context of disruption of supply chains.
Another rally in energy prices is coming
This increase ends two months of declines made possible by temporary government measures to reduce household energy bills. Germany had introduced in June an exceptional reduction in fuel tax and a ticket of 9 euros per month valid on all public transport, except high-speed lines. Most of these measures ended in September.
And in October, a tax on gas aimed at avoiding the bankruptcy of energy groups should increase the bill even more. Result: experts fear a new price explosion in the coming months.
Thus, the inflation rate should rise to around 11% during the first quarter of 2023, according to the forecasts of the IFO institute. The Bundesbank expects inflation to rise to “more than 10%” for a year in December and to “more than 6%” in 2023.
To relieve households, the Government adopted a support plan of 65,000 million euros in early September, which includes checks for students and retirees, in particular.
Source: BFM TV
