Germany records highest annual inflation rate in over 70 years

Germany has recorded its highest annual inflation in more than 70 years, according to preliminary data released Tuesday by the country’s Federal Statistical Office.

Surging energy and food prices due to Russia’s attack on Ukraine saw full-year inflation reach 7.9% in 2022. The last time annual inflation was near that level was in 1951, when it stood at 7.6% as the post-war economic boom began. Annual inflation in 2021 stood at 3.1%.

The preliminary data showed that inflation slowed somewhat in December, to 8.6% compared to the same month in the previous year, as one-off government payments to help consumers pay their heating and gas bills took effect. In October monthly inflation had reached a record 10.4% before dipping to 10% in November.

INFLATION IN GERMANY HITS NEAR 50-YEAR HIGH AMID ENERGY CRISIS

Rising prices reduce consumers’ spending power. Many German unions have successfully campaigned for higher-than-average pay rises in recent months to offset the impact of inflation.

Meanwhile, unemployment figures in Europe’s biggest economy rose slightly in December to 2.45 million, or 5.4%. This was about 0.1 percentage point higher than in November, though such an increase is not unusual at the end of the year as temporary contracts expire.

The full-year average jobless figure for 2022 stood at 2.42 million, almost 200,000 fewer than in 2021.