This article was last updated on May 30, 2022
Annual inflation in Germany, which was 7.4 percent in April, rose to 7.9 percent in May with the latest rise in oil and gas prices.
This is the direct result of the Russia-Ukraine war, reaching the highest level since 1974.
Germany’s Federal Statistical Office (Destatis) announced the leading data for May on price increases.
Accordingly, annual inflation, which was 7.4 percent in April, rose to 7.9 percent in May, reaching the highest rate since the winter of 1973-1974, when the first oil crisis was experienced.
The expectation for inflation was that it would rise to 7.6 percent in May.
Inflation in the country increased by 0.9 percent on a monthly basis.
In the statement of Destatis, it was stated that the record inflation was due to the Russia-Ukraine war and rising energy prices. it was said.
It is noteworthy that energy prices increased by 38.3 percent on an annual basis, while the annual increase was 11.1 percent in food prices and 2.9 percent in services.
EU-compliant CPI also increased by 1.1 percent on a monthly basis and 8.7 percent on an annual basis in May.
While it is noteworthy that supply bottlenecks and significant price increases, especially in energy products, have put upward pressure on inflation, the loss of purchasing power puts the European Central Bank (ECB) and politicians under pressure.
According to a survey released in mid-May by international consulting firm McKinsey, high inflation was the top concern for Germans, followed by the Russia-Ukraine war, the Kovid-19 outbreak.
“Headline inflation in Germany will accelerate in the coming months”
ING Germany’s Chief Economist Carsten Brzeski, in his assessment of the inflation figures in May, stated that the war in Ukraine increased energy and commodity prices and the increase in inflationary pressure brought inflation up in Germany once again, and said:
“This keeps the ECB’s discussion of a possible 50 basis point rate hike in July alive. While we would like to see a rebalancing in inflation rates, the war in Ukraine and the continued volatility and upward pressure on energy, commodity and food prices made headlines in Germany. Inflation will accelerate further in the coming months.”
German Finance Minister Christian Lindner, in his evaluation before the inflation figures were announced, noted that the fight against inflation must be a priority.
Emphasizing that inflation is a huge economic risk, Lindner said that inflation must be fought in order to prevent an economic crisis.