IN OCTOBER, the annual inflation rate in Germany amounted to 10.4 percent, which is the highest value in the last 70 years, the Federal Statistical Office in Wiesbaden announced. “The main reason for high inflation remains the enormous rise in energy prices, but a noticeable increase in the prices of other goods and services is also evident,” said the director of the Federal Statistical Office, Georg Thiel.

He particularly cited the drastic rate of price increases for food, which rose by an average of 20.3 percent.

Compared with October last year, edible oil rose the most in price (49.7 percent), followed by dairy products and eggs (28.9 percent), and bread and cereal products (19.8 percent). The biggest price jump in the energy sector was recorded for natural gas, which is 109.8 percent more expensive than in the same period last year. Fuel for cars is on average 22.3 percent more expensive.

This is the biggest price increase since 1951, and experts do not foresee any easing. “In November, we can still expect a high inflation rate above 10 percent,” said Sebastian Dullien of the Institute for Macroeconomics and Economic Growth Research.

He expects the inflation rate to fall more permanently below 10 percent in March next year, when the government measure capping the maximum gas price comes into force. Economists fear that inflation could affect consumer sentiment and reduce spending, which in turn could negatively affect the economic recovery.

A public opinion survey conducted by the YouGov institute at the beginning of November shows that more than half of respondents plan to spend less on Christmas gifts this year.

Source:index.hr