Rising energy costs due to anti-Russia sanctions are pushing up consumer prices
Annual inflation in Germany accelerated to 7.9% in May, final estimates from the country’s Federal Statistical Office (Destatis) show. In May alone, consumer prices rose by 0.9%, after jumping 0.8% in April.
According to the agency’s press release on Tuesday, it’s the largest inflationary spike to hit Europe’s largest economy in almost half a century.
“Inflation in united Germany shows a maximum for the third month in a row. The main reason for high inflation is still rising energy prices. We are also seeing an increase in prices for many other goods, especially food… The last time such a high level of inflation was observed was in the winter of 1973-1974, when oil prices rose sharply as a result of the oil crisis,” Destatis President Georg Thiel was quoted as saying.
Germany is grappling with a cost of living crisis amid soaring global energy prices, propelled by Ukraine-related anti-Russia sanctions. Natural gas prices have increased by 55.2% compared to May 2021, and fuel prices are up 41%, Destatis data shows.
The report says that without the surge in food and energy costs, inflation would have been less than half the current rate. The agency notes that prices are also being affected by post-pandemic supply chain disruptions.
Analysts expect price rises to slow in the coming months, with Germany’s Bundesbank forecasting a 7.1% inflation rate by the end of this year.
