Germany: Inflation hits record 10%, recession expected

Tuesday, October 4, 2022 | Tag Cloud Tags: , , , , , , , , ,

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by Karen Faulkner, Worthy News Correspondent

(Worthy News) – Inflation in Germany increased to a record 10% last month as the country expects to enter a recession, DW reports.

As with most countries facing a similar situation currently, such high inflation in Germany is the result of soaring energy prices brought on by Russia’s invasion of Ukraine.

Germany’s federal statistical office Destatis reported last week that energy prices were 43.9% higher in September 2022 this year than in September 2021, DW reports. The end of a fuel subsidy and the €9 public transport ticket “presumably had an impact on the inflation rate in September,” Destatis said.

German Chancellor Olaf Scholz said at a press conference that his government “will do everything so that prices sink.” Scholz also announced an energy relief package worth €150-200 billion ($145-194 billion), DW said.

Prior to the announcement on inflation, economists predicted Germany is on the way to a recession brought on by the global fuel and energy crisis and the sharp reduction in purchasing power, DW said. In a statement to reporters, Torsten Schmidt, head of economic research at the RWI think tank, said the high price of energy is the main factor “driving Germany toward recession,”

According to a statement by the ifo Institute in Munich, Germany’s inflation will likely average at 8.8% in the coming year, DW said.

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