German inflation has reached a four-decade high as a result of rising energy prices.
In April, German inflation reached its highest level in more than four decades, fueled by natural gas and mineral oil prices that have skyrocketed since Russia’s attack on Ukraine.
Consumer prices harmonised to make them comparable with inflation data from other European Union countries (HICP) rose 7.8 % year on year, up from 7.6 % in March, according to the Federal Statistics Office on Thursday.
Germany’s inflation reading, the eurozone’s largest economy, comes before data for the entire 19-country bloc on Friday. In March, eurozone inflation reached a new high.
Analysts polled by Reuters predicted an annual German HICP reading of 7.6 % in April.
According to the statistics office, the last time Germany experienced such high inflation was in autumn 1981, as a result of the first Gulf War.
“The hoped-for slight easing of inflationary pressure, which seemed tangible in light of the drop in gasoline prices, has once again failed to materialize,” said Elmar Voelker, an analyst at LBBW bank.
“This reads as another clear request to finally give up its hesitancy in terms of exiting its ultra-loose monetary policy,” Voelker added.
On Thursday, ECB Vice President Luis de Guindos stated that the central bank must keep a close eye on the recent rise in inflation expectations above its 2% target.
A key indicator of long-term inflation expectations in the eurozone was at 2.4 % , near its highest level in a decade.
Energy prices have been pushing up costs, with March producer prices – the first month to reflect the Ukraine war – seeing the largest year-on-year increase since records began in 1949, indicating bad news for consumer inflation.
The German government expects inflation to be 6.1 % in 2022 and 2.8 % the following year, citing the effects of rising energy prices in Europe’s largest economy, according to the economy ministry on Wednesday.
Gazprom says Poland is still buying Russian gas in Germany
Russia’s Gazprom said on Thursday that Poland is still buying Russian gas in Germany, and that reverse supplies to Poland via the Yamal pipeline amount to around 30 million cubic metres per day.
Gazprom halted gas supplies to Poland and Bulgaria on Wednesday over their refusal to pay in roubles, and threatened to do the same to others.
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