German inflation pushes higher – report

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Germany’s inflation rate rose 8.7% year on year in January and 1% month on month, according to the Federal Statistical Office (Destatis) on Wednesday.

According to data that confirmed preliminary results, consumer prices increased by 9.2% year on year when compared to other European Union countries. Prices increased by 0.5% in January compared to December.

“Following a slowdown at the end of last year, the inflation rate thus remains elevated,” Destatis President Ruth Brand explained. “We are observing price rises for many goods and, to an increasing degree, also for services. Households paid higher prices in January, particularly for energy and food,” she added.

Despite relief measures, energy product prices were 23.1% higher in January, according to the report. According to Destatis, a particularly large increase was recorded for household energy prices, which were up 36.5% year on year.

Food prices increased 20.2% year on year in January. “The rate of increase in food prices was thus more than twice the overall inflation rate,” according to the report.

In January 2023, service prices increased 4.5% over the previous year. Maintenance and repair of dwellings (+16.9%) and catering services in restaurants, cafes, and the like (+10.9%) experienced above-average price increases.

Last year, the EU’s largest economy experienced record inflation as a result of a surge in energy prices caused by a drop in natural gas deliveries from Russia due to Ukraine-related sanctions. Pipeline maintenance issues and sabotage of the Nord Stream pipelines exacerbated the shortage. Germany, according to Economy Minister Robert Habeck, will avoid a sharp economic decline but will enter a technical recession.