German inflation rate hits high in 2022
Price growth in Germany slowed in December, falling to single digits thanks to lower energy prices and a government bailout in December that helped ease some consumers’ utility bills.
But even with those positive trends, Germany ended 2022 with an overall inflation rate of 8.7%, the highest annual rate since the country’s reunification after the end of the Cold War in December. in 1990 and up from just 3.2% in 2021, the federal statistics office said Tuesday. Policymakers remain concerned that it could drag into next year before price pressures in Germany, Europe’s largest economy, stabilize.
In December, the annual inflation rate was 9.6%, down from 11.3% the previous month, the statistics office said. Officials note a government aid package subsidized energy bills for the country’s lowest-income households in December to lower interest rates later in the year.
“The inflation rate was significantly lower than in previous months, partly due to the December emergency aid,” the statistics office said.
Spain, Europe’s fourth-largest economy, also reported a slower pace of inflation, to 5.6% in December, down from 6.7% the previous month, according to data from the Institute of Economic Affairs. National Statistics released on Friday.
There, as in Germany, the intervention of the national government to cool down energy prices contributed to the deceleration of inflation.
Inflation rates in both countries have slowed since November, but economists predict it will take at least another year to reach the European Central Bank’s 2% target. But declines in Germany and Spain are expected to spark debate among ECB policymakers about whether inflation has peaked and when the bank could end it. interest rate hike.
German Finance Minister Christian Lindner stressed that officials need to focus their efforts in the new year to bring inflation back to 2%.
“This must be a priority for the European Central Bank and the German government,” he said in remarks published in the weekly Bild am Sonntag newspaper on Sunday. “Because permanently high inflation will weaken our economic foundation.”