Energy price jumps and significantly increased food prices are driving inflation in Germany upwards. It is questionable whether the tax rebate on refueling in June slowed down the rise in prices.
Life in Germany has recently become extremely expensive, and according to economists, there is no sign of a quick relaxation for the time being, despite the federal government’s relief measures.
In the afternoon, the Federal Statistical Office will publish an initial estimate of how inflation developed in June in Europe’s largest economy. In May, sharp rises in energy and food prices pushed the inflation rate to its highest level in almost 50 years. Consumer prices were 7.9 percent above the level of the same month last year.
Not as high since reunification
Inflation rates at the current level have never existed in reunified Germany. In the old federal states there were similarly high values in the winter of 1973/1974. At that time, mineral oil prices had risen sharply as a result of the first oil crisis. Higher inflation rates reduce the purchasing power of consumers because they can then afford less for one euro.
According to one analysis, low-income families suffer most from high inflation. While the shopping baskets for German households have risen by an average of 7.9 percent over the past twelve months, low-income families have even had to pay 8.9 percent more for their typical purchases. The Institute for Macroeconomics and Business Cycle Research (IMK) of the trade union Hans Böckler Foundation recently came to this conclusion. “The increase in the price of residential energy is disproportionately burdening households with lower incomes, and the increase in the price of food is also having a greater impact,” it said.
In this way, the citizens should be relieved
The federal government is trying to relieve the burden on citizens with a tax reduction when filling up, the 9-euro ticket, a flat-rate energy price in September/October and other measures. The tax relief on fuel, which applies from June to the end of August, is 35.2 cents for premium petrol and 16.7 cents for diesel, including VAT. However, not all of this has reached consumers so far: according to the ADAC, the fuels are still too expensive despite the recent declines.
Federal Chancellor Olaf Scholz (SPD) wants to discuss on July 4 in a so-called concerted action together with top representatives of employees and employers how price developments can be brought under control.
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.
