Thursday, October 21, 2021

German inflation rises to record pace in September

BERLIN – German inflation accelerated at a record pace in September, data showed on Thursday, as Europe’s biggest economy recovers from the pandemic and its companies grapple with supply crunch.

The Federal Statistics Office said consumer prices rose 4.1 percent year-on-year compared to 3.4 percent in August to make it comparable with inflation data from other EU countries.

This was the highest rate recorded since January 1997, when the EU-accommodative series began.

Christian Lindner, leader of the business-friendly Free Democrats (FDP) and candidate to be the next finance minister in a possible three-way coalition with the Social Democrats (SPD) and the Greens, called for a return to Twitter. More conservative fiscal policy.

He said the high inflation rate is another reminder that policymakers should “focus on easing the burden for the middle class and returning to solid public finance”.

Under outgoing Finance Minister Olaf Scholz, who is in pole position to succeed Chancellor Angela Merkel after the SPD’s election victory, Germany abandoned its fiscal policy of balanced budgets and a record new amount of funding to fight the pandemic. Took a loan

An analysis of inflation data showed that energy and food prices increased the most.

Inflation has spiked this year, from tax hikes to supply constraints and rising commodity prices, fueling debate about the need for exceptionally lax monetary policy.

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The Bundesbank said this week that German inflation was likely to accelerate from already high levels and remain above 2 per cent by mid-2022, well above the European Central Bank’s 19-nation euro zone target.

State lender KfW chief economist Fritzi Kohler-Geib said in a note that should the outright effect disappear in the new year, other factors such as lack of natural gas and coal supplies could keep pressure on prices.

“Energy prices are currently rising for other reasons as well: for example, there are coal and natural gas shortages and supply problems from Russia and Norway. In addition, the cold last winter emptied stocks, And wind power is suffering a weather-related lull,” Koehler-Geib said.

She said: “As a result, energy prices are likely to remain high through the end of the year, with gas and electricity components outpacing them. This will last the rest of the year, before gradually falling below 2 percent in mid-2022. Headline inflation should be kept above 3 per cent.

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This News Originally From – The Epoch Times

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