Prices are skyrocketing in Germany

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Published 17 October 2021 at 17.44

Economics. “Why has everything suddenly become so expensive in Germany?” reads the question in the weekly magazine Spiegel. In just one year, the prices of ordinary food and energy have risen sharply. A salad head costs 35 percent more than a year ago and at the same time house oil has risen in price by 77 percent.

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Inflation

  • German inflation breaks record – highest since 1993
  • The price index that shows: Inflation the highest in 30 years
  • Coffee price up 60 percent since January
  • Food prices have risen by 40 percent in one year
  • Used car prices are rising

According to official figures, consumer prices increased by only 4.1 percent in September compared to the same month last year.

But even the official inflation figure – which probably few Germans recognize when they visit the grocery store – is the highest in 28 years. Germany has not had inflation above 4 percent since 1993, shortly after the reunification of East and West Germany, when inflation reached 4.3 percent.

Higher inflation weakens consumers' purchasing power, the amount of goods and services you can buy for every euro. Rising inflation is also not good for savers who, for example, have to keep certain assets in low-interest bank accounts, where parts of German pension savings are located.

According to estimates from Commerzbank's subsidiary Comdirect, German savers lost a total of EUR 47 billion on that the balance in their savings accounts lost purchasing power during the first nine months of 2021, writes German Welt.

covid-19 has been eased. According to this, official, theory, inflation is “transient” and will soon go away on its own.

Assessors now expect the official inflation rate to rise to five percent in Germany this year. According to the official opinion, however, this will also be a “temporary phenomenon”.

Germany has traditionally been wary of inflation for historical reasons, as extreme hyperinflation in the early 1920s destroyed the economy and was considered to have paved road to World War II.