German Inflation Jumped to Highest Level in Almost 30 Years in 2021 -- Update
By Maria Martinez
German consumer prices rose strongly in 2021, posting their
highest annual reading since 1993, statistics office Destatis said
Consumer prices in Germany rose 3.1% on average in 2021 compared
with 2020. The inflation rate in the previous year was 0.5%.
The increase in the inflation rate was caused mainly by base
effects due to lower prices in 2020, Georg Thiel, president of the
federal statistics office, said. In this context, the temporary
reduction in the value added tax in 2020 and the sharp decline in
mineral-oil product prices also had an upward effect on the overall
inflation rate, Mr. Thiel said.
"In addition to the temporary base effects of the past, there
are more and more crisis-related effects such as delivery
bottlenecks and marked price increases at upstream stages in the
economic process," Mr. Thiel said.
The prices of energy products were markedly up, rising 10.4% on
year in 2021, following a 4.8% decline in 2020. Like the base
effects, which were due to the very low prices in 2020, the CO2
charge introduced at the beginning of the year had an upward effect
on prices here, Destatis said.
Food prices rose 3.2% in 2021 compared with 2020. Destatis said
the price increase surged in the second half of 2021 due to the
base effect resulting from a cut in the value added tax rate.
The prices of goods were up 4.3% on average in 2021 compared
with 2020. Non-durable consumer goods recorded a 5.4% increase. The
prices of durable consumer goods rose 2.4%, including price
increases in vehicles, as well as furniture and lighting equipment.
The prices of services were up 2.1% in 2021 compared with the
Much stronger price increases were recorded for some services,
including services of social facilities, maintenance and repair of
vehicles and hairdresser services and other services for personal
Telecommunications prices remained nearly unchanged, while for
example long-distance rail tickets were 1.8% less expensive,
Destatis's data showed.
In December, consumer prices rose 5.3% on year measured by
national standards, reaching its highest level in 2021 at the end
of the year, in line with the forecast of economists in a poll
conducted by The Wall Street Journal. They rose 5.7% on year by
European Union-harmonized standards, also in line with
Consumer prices rose 0.5% on month by national standards and
0.3% by EU-harmonized standards, both in line with forecasts.
Write to Maria Martinez at firstname.lastname@example.org
(END) Dow Jones Newswires
January 19, 2022 04:05 ET (09:05 GMT)
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