Inflation rate of 12.3 percent: concerns about inflation

Dhe sales prices in German wholesalers rose more sharply in August than they have done for decades. They were 12.3 percent higher than a year earlier, as the Federal Statistical Office announced on Monday. The last time there was a stronger increase was in October 1974 with 13.2 percent during the first oil crisis. As a result, the upward trend in prices accelerated again significantly: in July the rate of inflation was 11.3 percent and in June 10.7 percent. The development is an indicator of future inflation tendencies, as wholesaling is the hinge between manufacturers and end customers.

“The high rise in wholesale prices compared to the previous year is due, on the one hand, to the current sharp rise in prices for many raw materials and intermediate products,” explained the statisticians. “On the other hand, there is a base effect due to the very low price level of the previous months in connection with the Corona crisis.” According to the information, a strong price driver was the development of ores, metals and metal intermediate products: they rose by 63.4 percent .

There were also particularly sharp price increases in the wholesale of scrap and residual materials (plus 101.7 percent), raw and sawn timber (plus 57.8 percent) and solid fuels and petroleum products (plus 35.5 percent). Grain, raw tobacco, seeds and animal feed were also considerably more expensive than in the previous year (plus 19.3 percent).

Due to the significant recovery of the world economy from the Corona recession, the prices for many products are currently rising rapidly. The world’s largest economies, the USA and China, in particular, are forecast to see strong growth this year, especially since major economic stimulus programs have been launched there. German consumers are also feeling the effects of this in prices: the inflation rate is currently 3.9 percent, higher than it has been since 1993.

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