Germany: Harmonized inflation rises to record-high level in August
Harmonized inflation rose to a record-high 8.8% in August (July: 8.5%), confirming the preliminary result. The print reflected a surge in food and non-alcoholic beverages prices (with food inflation reaching 16.4%), while prices for housing, water, electricity, gas and other fuels, transport, and restaurants and hotels also rose sharply. The government’s anti-inflation measures, which included the introduction of a EUR 9 train ticket and fuel discounts, prevented a sharper rise in transport.
Consequently, the trend pointed up as annual average harmonized inflation rose from 6.3% in July to 6.8% in August. Meanwhile, consumer price inflation rose to 7.9% in August from 7.5% in July.
On a monthly basis, harmonized consumer prices rose 0.42% from the previous month in August, down from the 0.76% drop recorded in July.
Analysts at the EIU added:
“Russia’s invasion of Ukraine has exacerbated inflation by driving up commodity prices, especially for energy and food. […] The 80% cut-off of Russian gas imports has raised gas prices to unprecedented levels, at over four times their year-earlier level in July 2022, and 20 times their July 2020 level. We expect inflation to continue to accelerate over the remainder of 2022 as buyers scramble to replace lost Russian supply and the cost feeds through to intermediate goods. Consumer price inflation will gradually subside over 2023, averaging 6.5% as prices stabilise at a high level.”