Inflation in Germany made another significant jump in March: as the Federal Statistical Office announced on Wednesday, according to an initial estimate, consumer prices rose by 7.3 percent compared to the same month last year. This was again significantly more than in February with an inflation rate of 5.1 percent.
Christian Siedenbiedel Editor in business. I am following
The March inflation rate is also so interesting because now, for the first time, the consequences of the Ukrainian war have been incorporated into the inflation rate to a greater extent. For the February inflation rate, the war had hardly played a role yet, because the inflation data are collected with a certain time delay.
Bread becomes more expensive by 7 percent
Consumers have felt the increase in gasoline prices and the changes in the supermarket particularly strongly – many will only really perceive the higher heating costs with the heating cost accounting. At the gas station in March, people now often paid significantly more than 2 euros per liter of gasoline or diesel. The cartel office is still to clarify how strongly the mineral oil companies also played a role in this.
More details on the prices of individual products are provided by figures from the state statistical offices, for example from North Rhine-Westphalia, which usually come very close to the nationwide figures.
The price increase for heating oil was therefore particularly drastic. The price had already climbed to historic highs even before the war in Ukraine, but at the end of February this worsened significantly again. Now it turns out: the price increase compared to the previous year was 99.8 percent in March, so this is, after all, practically a doubling of the price. In February, the increase compared to the same month of the previous year was still 37.7 percent.
The price increase for gasoline and diesel was 49.1 percent, an increase of almost half. Gas for consumers has also become significantly more expensive, the price increase was 30.1 percent, compared to 21.8 percent in February.
But also with the food it is sometimes getting more and more violent. On average, they rose by 7.5 percent. Edible fats and vegetable oils became noticeably more expensive with an increase of 19.7 percent. After all, Ukraine is an important producer of vegetable oil. In some cases, the oil was already scarce in the supermarkets, in some shops the levy was limited to one or two bottles per household. Restaurants are also feeling the high oil prices in the production of french fries.
Vegetables also became significantly more expensive, on average by 14.2 percent compared to the same month last year. Bread and cereal products rose by 7.1 percent, after 5.9 percent in February.
Prices for gas and electricity are likely to continue to rise
“For gas and electricity, the pressure could increase a little more, as prices for consumers are only gradually adjusted,” said Holger Schmieding, the chief economist of the Hamburg-based banking house Berenberg. “The rate can also increase for foodstuffs, as the prices for cereals and other basic materials are only included in the prices for finished foodstuffs with a time delay.” Inflation is likely to remain high until the summer, the economist said, even if it could peak in April.
“This is once again an unpleasant surprise for the ECB,” Schmieding said. “But it probably won’t change the outlook for her politics.” If the economy picks up again from early summer, the ECB will end its bond purchases in the third quarter in order to raise its key interest rates by 2 basis points for the first time in December, says Schmieding.
