The German Government has implemented during this year various aid packages to reduce the impact of prices on the cost of living. Among the measures of third relief package is found the reduction from 19% to 7% of sales tax for gas supplies and district heating, which has been in force since October. Nevertheless, price cap of electricity and district heating recently announced by the Government will come into effect next year.
This had a cushioning effect on price increases of energy products, says Destatis. Nevertheless, energy prices in November were 38.7% above the level of the same month of the previous yearthough compared to october the price increase will weakened somewhat, down from 43%.
The German Government will use some €200 billion created to counter the impact of the Russian invasion of Ukraine and taxes on windfall profitsGermany will cap prices for private households and small businesses until the end of April 2024, the draft showed.
The cap will cover 80% of the previous year’s gas consumption by private households and small businesses at 12 euro cents per kilowatt hour, it said.
While, domestic energy continued to increase particularly sharply, 53.2%. The price of natural gas more than doubled, by 112.2%, and the price of district heating rose by 36.6%. In addition, consumers not only had to pay significantly more for domestic energy, but also for fuel, which became more expensive by 14.6%.
For his part, the price of food increased by 21.1% in November compared to the same month last year, so the rise here was more than double that of general inflation.
“We are seeing more and more price increases for many other goods besides energy. The continuous increase in food prices is particularly notable for households,” says the president of Destatis, Georg Thiel.
Refering to Core inflation stood at 5% in November. excluding from the calculation only the prices of the Energy, inflation Germany was 6.6%.
Looking to the future, “the limitation of the price of energy, which will enter into force in January, retroactively and whose legal ratification is scheduled for March, should contain energy inflation next yearalthough at the moment it is not clear how it will be reflected in the CPI”, comment the analysts of Pantheon Macroeconomics.
Regarding core inflation, they believe that it will recover in December and will continue to be high relative to the national CPI in the coming months. “The good news is that price surveys are picking up, indicating that inflationary pressures should subside over time“, they add.
However, German households become “less pessimistic” about the inflation outlook. In addition, they predict a moderation in price pressures over the next yearsaid on Friday bundesbankciting a monthly survey of consumer expectations.
Source: Ambito
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