Six reasons for currency devaluation – and possible countermeasures

Berlin Everyone notices it in their own wallets: After years of rather weak inflation, prices in Germany have been rising sharply since January 2021. In April 2022, the inflation rate measured against the European harmonized index was 7.8 percent, according to the different German definition 7.4 percent.

The producer prices, i.e. the selling prices of the manufacturers at all stages of production, even rose by 33.5 percent. This is the highest increase since records began in 1949.

When the Federal Statistical Office publishes the first estimate for May inflation on Monday (2 p.m.), experts expect a further slight increase.

The causes of high inflation

1. Too much money

After the financial crisis of 2008/09, which culminated in a sovereign debt crisis in the euro area in the years that followed, the European Central Bank (ECB) drastically expanded the money supply. The US Federal Reserve and other central banks followed a similar strategy.