In 2008 Germany had highest inflation in 14 years

In the year 2008 consumer prices in Germany increased as much as for the last time 14 years ago. As compared to the year 2007, inflation amounted to 2.6% in 2008, according to the Federal Statistical Office. In December this year inflation reached 1.1% in comparison with the same month in 2007. Since November this year consumer prices have increased by 0.3% after they had fallen by 0.5% in the period from October to November this year.

The year 2008 started with relatively high inflation rates which reached a peak in the months of June and July (+3.3% each as compared to the respective months in 2007). Since then inflation rates have become smaller again and fell below 2.0% in November this year.

High inflation rates up to the middle of this year were in particular due to the price development of heating oil and fuels, but also to that of some foodstuffs. Prices for these goods had started rising in autumn 2007, and from the summer this year onwards prices stabilized and started falling again.

The harmonized consumer price index for Germany will presumably increase by 2.8% on average in 2008 as compared to last year. In December this year it probably rose by 1.1% with regard to December 2007 and since November it increased by 0.4%.

For the time being, the above figures are provisional given that so far only six federal German states have made data available. Final results will be available on January 15th 2009.

Many economists expect a very small inflation rate of clearly below 1% for 2009 which would have positive effects on real wage increases of consumers. GERMAN