Inflation over twelve months jumped to 7.3% in Germany and 9.8% in Spain according to figures published on 30th March last. Rates not seen for more than 30 years in both countries. This increase is explained, in particular, by the weight of the war in Ukraine on energy and food goods.
Inflation in Germany jumped to 7.3% in March over the last twelve months, according to provisional figures which have been published. Spain suffers the same fate, with inflation reaching 9.8%. In Berlin as in Madrid, the rise in prices has reached record highs. Such a level had not been seen since November 1981 in Germany (then FRG) and since May 1985, in Spain. The harmonized price index, which serves as a reference at European level, increases by 7.6% for Germany, pulverizing the medium-term objective set at 2% by the European Central Bank (ECB) .
“Russia’s attack on Ukraine” is largely responsible for this explosion, corroborates Destatis, the German statistics office. The Russian invasion effectively caused a new surge in energy prices in Europe, Moscow being one of the main suppliers of hydrocarbons to the European Union. Energy prices in Germany jumped 39.5% in March compared to the previous year. A marked acceleration, while the increase was 22.5% in February and 20.5% in January, according to the institute.
Cereal prices soar
The war also increases the cost of foodstuffs, which rose by 6.2% in March, following 5.3% in February and 5% in January. Russia and Ukraine are, in fact, two major world exporters of cereals, particularly wheat. Nitrogen fertilizer prices, of which Russia is one of the main exporters, and energy prices also contributed to this increase.
Finally, the invasion increases the shortages of components and raw materials and further strains the supply chains already destabilized by the coronavirus pandemic, because of the sanctions once morest Russia. These shortages weigh down German industry, which is forced to pass on these additional costs to consumers. The price of goods thus rose by 12.3% in March.
The “wise men”, experts who advise the German government, have also revised their growth forecasts for 2022 from 4.6% to 1.8%, while counting on record inflation at 6.1%.
A six billion euro plan to dampen inflation in Spain
According to INE, the Spanish statistics office, the trend is the same in Spain. The Governor of the Central Bank had indicated, on March 29, to anticipate a “new very significant rise in inflation in March” due to the war in Ukraine, at the origin of a “kind of energy shock”.
In an attempt to cushion the consequences of the conflict, the government of socialist Pedro Sanchez adopted, on March 29, a direct aid plan of six billion euros for households and businesses, mainly targeting the price of electricity. energy. This plan includes a subsidy of 20 euro cents per liter on fuel and a 15% increase in the amount of the subsistence minimum income, paid to the most vulnerable families.
It also extends until June 30 the tax cuts in force since last summer and intended to offset soaring electricity bills.
All of Europe affected
The inflation rate in the euro zone broke a new record in March, rising to 7.5% over one year, according to Eurostat figures published on Friday 1 April. It was the effect of the war in Ukraine that further accelerated the spike in energy prices. Indeed, in February, inflation had reached 5.9% for the 19 countries that have adopted the single currency, which was already the highest level recorded by the European statistics office since the implementation of this indicator. , in January 1997.
Inflation has hit a new all-time high every month since November. The rise in consumer prices is still fueled by soaring oil, gas and electricity prices, but even more markedly than previously. Energy prices jumped 44.7% year on year in March, following +32% in February.
With Agency / ECO Inspirations
