Germany faces its highest inflation rate in 30 years in 2022

In a year characterized by soaring energy and food prices, Germany’s average inflation rate in 2022 reached 7.9 percent, up from 3.1 percent in 2021. Russia’s invasion of Ukraine, as well as supply bottlenecks resulting from the war, are believed to be among the factors that have contributed to higher prices.

Impact of the Ukraine-Russia war

Germany’s average inflation rate in 2022 reached 7.9 percent, its highest level since reunification in 1990, according to the country’s statistical office. According to the German news agency’s Jan. 3 report, the 2022 rate is more than double the 3.1 percent rate seen in 2021.

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According to the report rising energy and food prices have been a major driver of inflation for several months. As expected, the German Federal Statistical Office (FSO) has reportedly identified Russia’s invasion of Ukraine, as well as the resulting supply bottlenecks, as two key factors that led to the record inflation rate.

In December, German consumers had to pay 24.4 percent more for energy than a year earlier. Food prices rose 20.7 percent in one year“, explains the agency’s report.

Monthly inflation slows in Germany

Despite recording what has been described as the country’s worst overall inflation rate since 7.6% in 1951, FSO data suggests that the monthly rate fell to 8.6% in December 2022. Prior to that, the rate had averaged 10.4% and 10% in October and November, respectively.

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To minimize the impact of rising prices on the population, the German government reportedly intends to dump “billion in aid.“It also intends to achieve this by using “brakes on electricity and gas prices.“According to the report, some economists are optimistic that these measures will tame inflation in 2023.

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