Spikes in energy prices and significantly higher food prices are pushing up inflation in Germany. It is doubtful whether the fuel tax break in June slowed the rise in prices.
Living in Germany has become extremely expensive recently, and according to economists, there are no signs of a rapid détente, despite the bailouts of the federal government.
In the afternoon, the Federal Statistical Office will publish its preliminary estimates of the development of inflation in Europe’s largest economy in June. In May, soaring energy and food prices pushed inflation to an all-time high in almost 50 years. Consumer prices were down 7.9 percent. higher than in the same month last year.
Not so high from reunification
Inflation rates at their current level have never existed in reunified Germany. In the old federal states, similar high values were recorded in the winter of 1973/1974. During this time, oil prices rose sharply in the wake of the first oil crisis. Higher inflation rates reduce the purchasing power of consumers because they can then afford less for one euro.
Low-income families suffer the most from high inflation, according to one study. While German households’ shopping baskets have risen by an average of 7.9 percent in the last twelve months, low-income families have even had to pay 8.9 percent more for their typical purchases. This is the conclusion recently reached by the Hans Böckler Foundation Institute for Macroeconomics and Cycle Research (IMK). “Rising energy prices in housing are putting a disproportionate burden on lower-income households, and rising food prices also have a greater impact,” it wrote.
In this way, citizens should be relieved
The federal government is trying to ease the burden on citizens with tax cuts on refueling, a € 9 ticket, September / October energy flat rate and other measures. The fuel tax credit, which applies from June to the end of August, is 35.2 cents for premium gasoline and 16.7 cents for diesel with VAT. So far, however, not all of this has reached consumers: fuels are still too expensive despite recent declines, according to the ADAC.
Federal Chancellor Olaf Scholz (SPD) wants to discuss on July 4 in the framework of the so-called share with leading employee and employers’ representatives how price changes can be brought under control. (dpa)