Ultimate
The exceptionally strong rise in costs continues. In April, the inflation rate in Germany reached 7. 4%, the Federal Statistical Office announced on Thursday after an initial estimate. In March, it was 7. 3%, in February 5. 1%.
Inflation rates above 7% were last observed in Germany about 40 years ago. At 7. 4%, inflation in the European Monetary Union has even reached its peak since its founding.
There was a notable replacement starting in March. Energy costs are no longer emerging as sharply as last year and, in some cases, have even come down compared to last month. On the other hand, food costs are emerging even more. These come with those affected in one way or another by the Ukrainian War, such as vegetable oil and cereal-based products, for example bread. Ukraine was one of the main manufacturers of both.
Economist Carl Christian von Weizsäcker even believes that officially measured inflation in the food sector is still underestimated, because for some of the food products affected by the war, supermarket shelves were empty, making it difficult to collect prices.
At gas stations, prices were not as high recently as around March 10. The price of the Suconsistente with E10 went from an average of 2. 20 euros to 1. 96 euros per liter, while diesel went from 2. 31 euros to 2. 02 euros per liter. However, those prices are still exceptionally high according to the old criteria and also compared to last year. The price of crude oil, which had risen to nearly $130 a barrel (159-liter barrel) following the Russian attack on Ukraine, has also calmed down somewhat. , high recently at $105. However, time and time again, news of war and sanctions can also increase it.
National statistical offices have published somewhat more detailed figures on the evolution of the costs of the various products. to a lesser extent, a package that more than offset the drop in oil costs since their peak in March, says economist Holger Schmieding of Hamburg’s Berenberg bank.
More expensive compared to last month have been liquid fuels (40%), peppers (15. 8%) and red meat (13. 9%). ) and diesel (-9. 8%), for example, were at lower prices.
According to the report, the year-on-year accumulation of the value of energy has decreased since March, from 42. 6% to 37. 6%. This is basically due to fuel oil, which has become cheaper compared to March to 13. 8%, the value thus accumulating “only” 74. 1% and no longer 99. 8% as in March. The scenario was similar for diesel: the price of fuel fell by 9. 8% compared to March, which still meant a price increase of 49. 9% compared to March. the year, but it is no longer a smart 65% as in March.
On the other hand, consumers are feeling the effects of the sharp rise in the prices of cereals and other staple foods. For all foods, the NRW inflation rate rose further, from 7. 5% in March to 10. 2% in April, in part because meat and meat products now charge 13. 8% more in April than in the same month last year, instead of 5. 2% in April. The season is becoming much more expensive than usual,” said economist Schmieding.
In the case of bread, the value has already risen by 10. 6% year-on-year, from 7. 5% in March. In the case of fats and oils, the year-on-year accumulation of the price has even fallen from 19. 7% in March. to 27. 7% in April. However, tourism also contributed to the slight accumulation of the NRW inflation rate. As an expression of the bottlenecks of the chain of origin, there is also a remarkable accumulation of inflation for customers’ durable goods. The inflation rate in this sector rose extra to 6. 8%, from 6. 3% in March.
What is the ECB doing in the face of exceptionally high inflation?
So far, the European Central Bank (ECB) is still reluctant to take swift action against peak inflation. The official line is that at the next financial policy meeting on June 9, based on the available data, end bond purchases in the third quarter, from July to September, and raise interest rates “later”. “Some time later” may mean only a week later, as well as a few months later, ECB President Christine Lagarde said.
However, more and more voices are being heard within the ECB, not only from national governors, but also from the Executive Board, advocating a first rate hike before the end of July. In this case, the central bank’s statement to date can also be interpreted as meaning that the last purchases of new bonds can be made only in June and that, according to the expected sequence, the path is then transparent for interest rate hikes in July.
In any case, the investment bank Goldman Sachs has revised upwards its forecasts on the long-term evolution of interest rates: it now expects the ECB to raise its reference rates to 0. 25% already in July, followed by extra rate hikes in September and December and 4 more steps in the next year 2023.
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