The war in Ukraine is expected to further increase inflation in Germany. The Ifo Institute even considers inflation of five percent possible this year. Gas and oil in particular could become significantly more expensive.
Russia’s attack on Ukraine is also fueling inflation in Germany. The reason for this is the threat of further price increases for gas and oil. That said Timo Wollmershäuser, head of the Ifo economic forecasts, in Munich. “A five before the decimal point of the inflation rate in 2022 as a whole is just more likely than a three.”
Price increases decided before Ukraine war
Inflation in Germany and the euro zone has been fueled for some time by significantly higher energy prices as part of the global economic recovery. Even before the Russian invasion of Ukraine, according to the institute’s regular surveys in the German economy, many companies wanted to raise their prices. This will therefore have a direct impact on consumers: according to Ifo, almost two-thirds of retailers are planning price increases on balance, and more than 85 percent of grocers. On average across all sectors, this index rose to a high of 47.1 points.
The Munich economists ask several thousand companies every month whether they intend to raise or lower prices in the next three months. The amount of the planned price changes is not asked.
Commodity prices continued to rise after the Russian invasion of Ukraine: A barrel (159 liters) of North Sea Brent cost more than $100 on Thursday for the first time since 2014, and oil prices continued to rise on Friday. Other raw materials such as wheat also became more expensive on the world market.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
