Germany witnesses highest inflation rates since 1973
As Germany continues imposing sanctions on Russian energy sources, it continues to witness an upward effect in prices and inflation as it nears a 50-years high.
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German Bundestag
German statistics office Destatis reported another hike in food and energy prices as inflation continues. Europe’s top economy, Germany, has reached 7.9%, the highest level since the 1973 oil crisis.
The surge came as the Ukraine war resulted in the collective-West imposing unprecedented sanction packages on Russia. The sanctions imposed on oil and gas hit Europe the hardest and consequently impacted inflation rates the most since late February said Destatis.
The agencies also pointed out that “another factor with an upward effect on prices” is the Covid-19 pandemic and all the supply chain interruptions it had caused throughout a period of two years.
In a year-on-year comparison, energy prices had reportedly risen by 38.3% in May, while food prices displayed an 11.1% leap.
By national standards, consumer prices in May increased by 0.9% and 1.1% by EU-harmonized standards, according to the data. Destatis is expected to publish its final results for the month on June 14th.
Back in March, calculations by the German Institute for Economic Research (DIW) in Berlin showed that if the German economy regularly adjusted to no longer rely on Russia for oil and gas, the corresponding restructuring would require up to a decade. The repercussions will also reflect on the volume of economic production in the country, as it will decrease by 3% within 18 months, data showed.
Later in April, Deputy CEO of Deutsche Bank, Karl von Rohr, Germany’s inflation rate could reach 10% if energy imports are limited.
