The happiness was short-lived: after a fall in inflation in December, many goods and services became more expensive again in the new year.
After slowing down in December, inflation in Germany picked up speed again at the beginning of the year. Consumer prices rose by 8.7 percent in January compared to the same month last year, the Federal Statistical Office announced on Wednesday. The authority thus confirmed a first estimate.
According to revised data, the annual inflation rate was 8.1 percent in December and 8.8 percent in November. In December, the one-off assumption of the down payment for gas and district heating customers by the state had dampened the rise in consumer prices. This effect disappeared in January.
Inflation mainly affects energy and food
“We are observing price increases for many goods and increasingly also for services. However, the rising prices for energy and food were particularly noticeable for private households in January,” explained the President of the Wiesbaden authority, Ruth Brand.
In January, household energy prices increased by 36.5 percent within a year. Natural gas prices rose by 51.7 percent and district heating by 26 percent. Consumers had to pay 30.6 percent more for heating oil. Electricity increased in price by 25.7 percent. On the other hand, there were signs of a certain relaxation at the petrol stations. At 7 percent, the price increase for fuel was lower than general inflation.
Food prices rose by 20.2 percent in January compared to the same month last year. The inflation rate for this was more than twice as high as the overall inflation rate.
Compared to the previous month, consumer prices rose by a total of one percent in January.
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Economists do not expect a thorough easing in prices this year. The federal government expects an annual average inflation rate of 6 percent. Higher inflation rates reduce the purchasing power of consumers. They can afford one euro less. This can weigh on consumption, which is an important pillar of the economy.
Source: Stern
