COVID-19: Inflation in Germany approaches a 30-year high

Germany's consumer inflation soared to 3.8% in July 2021, the highest level since December 1993, when it was 4.3% y/y. The German federal statistics office (Destatis) underscored that there is a significant low-base effect contributing to the acceleration.

In the second half of 2020, the VAT in Germany was temporarily reduced as a measure to support the economy during the COVID-19 crisis, which led to significant decrease of the consumer prices. Further, the energy prices, rising by 11.7% y/y in July 2021, were an additional driver of the recent growth of the overall indicator. Motor vehicles prices in EU's largest economy grew by 5.4% y/y, while the services prices increased by a more modest rate: 2.2% y/y.

Access data series on over 18 economic indicators for Germany here.