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Germany’s inflation reaches record high since 70s oil crisis

According to preliminary figures released by Germany’s Federal Statistical Office, inflation in May reached 7.9 percent, the highest level since the 1973/74 oil crisis.

Food prices increased by 11.1% year on year, while energy prices increased by 38.3%, according to Destatis, citing wheat shortages and fears of a global food crisis.

The Russia-Ukraine war has caused an increase in energy prices, which has had a negative impact “considerable impact on the high inflation rate”, the Office said.

According to Destatis, import prices in Germany increased 31.7 percent year on year in April. Natural gas had the greatest impact on energy prices, with a plus of more than 300 percent, followed by crude oil, which was up 77.5 percent year on year.

To cushion rising energy prices, Germany’s fuel tax will be temporarily reduced, and citizens will receive a one-time energy allowance of 300 euros ($323).

To encourage people to switch from driving to taking buses and trains, a cheap public transportation ticket will be available for just 9 euros per month during the summer.

The German government anticipates annual inflation of 6.1% in 2022″figure otherwise seen only in exceptional cases, such as during the oil crisis”.

However, it predicted that inflation would fall again next year.

According to market research firm GfK, consumer sentiment in Germany remains at an all-time low.

Despite further relaxation of Covid-19 restrictions, the Russia-Ukraine conflict and high inflation persist “weighing heavily on consumer sentiment”, it added.

About the author

Brendan Taylor

Brendan Taylor was a TV news producer for 5 and a half years. He is an experienced writer. Brendan covers Breaking News at Insider Paper.

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