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German economy on brink of disaster as inflation highest in 28 years – Eurozone on alert

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  • கருத்துக்கள உறவுகள்

According to the Federal Statistical Office, consumer prices rose by 4.5 percent throughout October compared to the same month last year. The Wiesbaden authority last measured an inflation rate of 4.5 percent in 1993.

 

 

 

 
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German economy on brink of disaster as inflation highest in 28 years – Eurozone on alert

GERMANY's inflation has reached its highest level in 28 years.

l Statistical Office, consumer prices rose by 4.5 percent throughout October compared to the same month last year. The Wiesbaden authority last measured an inflation rate of 4.5 percent in 1993.

In September, Inflation had already passed the four percent mark at 4.1 percent.

Compared to September, consumer prices rose by 0.5 percent in October.

Imported goods rose by almost 17 percent - as much as they did during the second oil crisis in 1981.

Over the years, natural gas imports rose by 178 percent, with electricity rising by 136 percent year-on-year.

 

Outgoing German Chancellor Angela MerkelOutgoing German Chancellor Angela Merkel (Image: Getty)

 

Frankfurt's banking districtFrankfurt's banking district (Image: Getty)

Coal and iron ore have also seen the price of imports rise by 118 and 97 percent respectively.

In addition, the withdrawal of the temporary VAT cut is now having a full impact.

The regular VAT rates have been in effect again since January 2021, so goods and services are tending to become more expensive again.

According to estimates, it is believed inflation rates of around 5 percent are possible until the end of the year.

READ MORE: Thousands more Britons to pay inheritance tax

 

 

Eurozone on red alert as Germany's inflation risesEurozone on red alert as Germany's i

nflation rises (Image: Getty)

 

For the start of 2022, inflation is likely to decrease noticeably.

But it is expected to be above 2 percent by the middle of the year.

According to the Federal Statistical Office, the last time the Wiesbaden authority put a four before the decimal point was back in December 1993, when it was at 4.3 percent.

Thomas Gitzel, chief economist at VP Bank, previously warned: "The risks of inflation are currently increasing significantly.

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Energy prices soar across GermanyEnergy prices soar across Germany (Image: Getty)

"So far, it has been safe to say that the rise in inflation is temporary.

"But the now significantly higher raw material prices are changing the starting position.”

Mr Gitzel warned the higher gas prices could have an impact on electricity prices.

He added: "This means that there is a risk that the so far selective price increases will eat into large parts of the economy.

 

German finance minister Olaf ScholzGerman finance minister Olaf Scholz (Image: Getty)

"The price-driving effect of the shortage will therefore be with us for longer than was originally expected."

The reason for the shortages is due to the almost synchronous economic upswing after the coronavirus pandemic.

Hendrik Tuch, chief strategist at asset management Aegon AM, added: “In order to achieve the EU's rather ambitious climate targets, massive investments are required to reduce CO2 emissions.

"The investments made by companies and governments to reduce CO2 emissions require a lot of extra materials, which drives up the prices of those raw materials.”

 

 

https://www.express.co.uk/news/world/1512986/German-economy-news-inflation-rise-latest-Eurozone-warning?fbclid=IwAR3naskKulqSyLByWGo_GKDTwJ5irMEMnk8NqNsznHuSn-FNZ0r7Mh8KaeE

Edited by பெருமாள்

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