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Ivan Kroshnyi about inflation in Germany, Spain, and Belgium

Hitting Record Levels: Inflation in Germany, Spain, and Belgium

Content:

1. Germany
2. Spain
3. Belgium

European countries are gradually releasing preliminary consumer price indices. The effects of rising spending are impacting the entire EU, with the poorest people in rich countries being hit hardest.

Germany

Based on currently available data, Federal Statistical Office (Destatis) reports that the inflation rate will go up by 7.9% in May 2022 (+7.4% in April).

Facts

Here’s the consumer price index as of May 2022:

✔+7.9% as of May 2021;
✔+0.9% as of April 2022.

Here’s the harmonized index of consumer prices as of May 2022:

✔+8.7% as of May 2021;
✔+1.1% as of April 2022.

In a nutshell

1. The May inflation rate rose by about one-tenth compared to its record high in April.
2. This level is the highest since German reunification and is similar to that observed in 1973/1974 after the oil crisis.
3. The war in Ukraine and skyrocketing energy prices are the reasons for the record levels. Another factor is supply chain disruptions.
4. Energy prices went up by 38.3% YoY. Food prices are above average (+11.1%).
5. Germany’s final results for May 2022 will be available on June 14, 2022.

About public transport and energy

1. Since 2015, short-distance rail travel prices went up by 19% (more than overall consumer price growth: +16.2%).
2. Ticket prices for combined passenger transport services rose by 13%.
3. Due to rising energy prices, the government intends to make short-distance public transport more attractive by introducing €9 temporary tickets.

Spain

The annual inflation rate reached 8.7% in May (8.3% in April). Similarly,

✔this growth is associated with higher prices for fuel, food, and non-alcoholic beverages. The estimated annual core inflation rate (the total index excluding volatile food and energy prices) went up by five-tenths, reaching 4.9%.
✔If the data is confirmed, it’ll be the highest level since October 1995, i.е., for 27 years. 

Belgium

The annual inflation rate reached 8.97% in May.

✔this level is the highest since August 1982, i.е., for 40 years (it was 9.02% back then). Energy prices are the main factor (+56.8% year-on-year, amounting to 4.8 percentage points in total). The food inflation rate reached 6.32%.

P.S. Today we’re dealing with the Eurozone’s statistics. The drop factors will be the same. There’s only one question: how bad the figures are.