The war in Ukraine increases consumer prices in Germany.
(Photo: IMAGO/Michael Gstettenbauer)
Berlin The war in Ukraine and rising energy prices are driving up inflation in Germany. In the most populous federal state of North Rhine-Westphalia alone, the inflation rate climbed to 7.6 percent in March and thus to the highest level since 1973, as the state statistical office announced on Wednesday. In Bavaria, consumer prices were 7.8 percent higher than in the same month last year and in Hesse, at 8.0 percent, they were at their highest level in 48 years.
Germany-wide data will be published by the Federal Statistical Office in the afternoon. Economists surveyed by Reuters had previously expected an increase to 6.3 percent, after 5.1 percent in February.
That would be the highest level since mid-1982. However, the data from the federal states indicate that inflation for the whole of Germany is now likely to be noticeably higher.
The Russian invasion of Ukraine is causing energy and raw material prices to rise dramatically. Consumers already feel this when filling up and heating.
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In NRW, fuels were already almost 50 percent more expensive by March 2021, and heating cost almost 40 percent more. Edible fats and oils, at around 20 percent, and vegetables, at a good 14 percent, also rose at an above-average rate.
In Bavaria, inflation was only five percent if you exclude heating oil and motor fuels. While services (without net cold rent) were only 3.8 percent more expensive within a year, goods in Bavaria cost 13 percent more.
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Because of the higher costs, more companies than ever before want to raise their prices in the next three months. This is the result of a survey by the Munich Ifo Institute.
“Russia’s attack on Ukraine is not only driving up energy costs, but also the prices of many agricultural commodities,” said Ifo economics chief Timo Wollmershäuser. “This means that the inflation rate is likely to rise to well over five percent this year.” The last time that happened in Germany was more than 40 years ago, when the inflation rate climbed to 6.3 percent after the second oil price crisis in 1981.
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