Price shock: mega inflation of 4.1 percent is eating up our money – economy

by time news

Here comes the next expensive shock!

According to a forecast by the Federal Statistical Office, the inflation rate jumped to 4.1 percent in September. A new record: the Wiesbaden authority last determined a four to the decimal point in December 1993 at 4.3 percent!

The prices for energy (+14.3 percent) and food (+ 4.9 percent) rose particularly sharply. Services increased by 2.5 percent and apartment rents by 1.4 percent.

Means: The rate of inflation continues to eat up our money!

BITTER: In August consumer prices had already risen by 3.9 percent compared to the same month last year. The Wiesbaden statisticians last determined a higher value in December 1993 at 4.3 percent.

Inflation has been fueled by rising energy prices for months. In addition, the withdrawal of the temporary VAT reduction is now fully effective.

In order to stimulate consumption in the Corona crisis, the federal government had temporarily reduced VAT from July 1, 2020 to December 31, 2020. The regular VAT rates have been in effect again since January 2021, so goods and services tend to be expensive again.

But the price explosion could continue, experts warn. Inflation rates of around five percent in Europe’s largest economy are considered possible this year.

The result:

► The bottom line is that pensioners have less money to live on as a result of the price increase. At 5 percent inflation, a pension of EUR 1000 corresponds to only EUR 950 after one year.

► The same applies to employees. For example, the value of 2,000 euros a month at 5 percent inflation corresponds to only 1,900 euros after one year.

► Inflation also hits savers hard. Savings books or fixed-term deposits lose value as a result of the price increase. Tip: Better invest in real estate, stocks and gold!

Experts also fear that the ghost will continue in the coming year. Volker Wieland, who advises the federal government as an economic expert, warns: “There is a risk that we will have to come to terms with higher inflation rates in the years to come.”

He observed with concern that parts of the economy were struggling with material shortages and delivery problems. At the same time, the demand for many goods is high. “This combination makes prices rise sharply and quickly.”

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