Germany's annual consumer price inflation hits fresh 13-year peak in August

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Germany's annual consumer price inflation hits fresh 13-year peak in August

On Monday, preliminary figures from Germany’s National Office of Statistics had revealed that the bloc’s largest economy’s annual ‘consumer price inflation’ had accelerated by the steepest pace in more than thirteen years this month, underscoring a rapid build-up in price pressures as the largest European economy seemingly had emerged from a pandemic-led fiscal pandemonium with businesses struggling to grapple with an ominous supply shortage.

In point of fact, latest inflation-surge in Germany, which had largely mirrored a similar economic backdrop in the United States whose key inflation indicator, core PCE (Personal Consumption Expenditure) price index, had soared 4.2 per cent over past twelve months through July, well-above US Federal Reserve’s target of 2.0 per cent, came against the backdrop of an aggressive build-up in price pressures due to a sharp rise in demands following a robust reopening of the economy.

Broader narratives, in tandem, had compounded further in context of a caustic upsurge in prices of raw materials alongside a staggering supply constrain, while a latest rise in delta cases had begun to take a bigger-than-anticipated toll with a nationwide supply chain disruption.

German inflation spikes to fresh 13-year peak

Aside from that, according to data from the bloc’s No 1 economy’s Federal Statistics Office, German consumer prices rose 3.4 per cent in August following a 3.1 per cent increase a month earlier, while the nation’s Consumer Price Index (CPI), a gauge to measure changes in prices that consumers pay off for goods and services in a given period of time, skyrocketed to 3.9 per cent this month, the highest level since December 1993, when the economy had boosted up by an earth-shaking German unification.

Meanwhile, since the August reading had marked up the highest since July 2008, a Commerzbank analyst Ralph Solveen said, “This is due to higher energy and food prices, while the core inflation probably even fell slightly from 2.9% to 2.8%”.