German inflation rate climbs to 2.5 pct in May: Destatis

Source: Xinhua| 2021-06-01 01:43:41|Editor: huaxia

BERLIN, May 31 (Xinhua) -- Germany's inflation rate climbed to 2.5 percent in May, according to provisional results published by the Federal Statistical Office (Destatis) on Monday.

Inflation in Germany has been increasing for the fifth consecutive month after the temporary reduction of the value-added tax, a government measure to mitigate the effects of the COVID-19 pandemic, ran out at the turn of the year.

An important cause for the high inflation rate was a "strong base effect," Axel Lindner, deputy head of the macroeconomics department at the Halle Institute for Economic Research (IWH), told Xinhua on Monday. A year ago, the COVID-19 pandemic "depressed many prices markedly, in particular those of energy goods."

Prices for energy products, such as heating oil and motor fuels, in Germany in May rose particularly strongly and were even up 10 percent on the previous year, according to Destatis.

At the beginning of the pandemic in spring 2020, crude oil prices collapsed due to low demand on the world markets but have recovered since. In addition, a charge of 25 euros (30.50 U.S. dollars) per tonne of carbon dioxide emitted was introduced in Germany at the beginning of the year.

Food prices and rents in Germany grew only moderately by 1.5 percent and 1.3 percent, respectively, according to Destatis.

"Headline inflation will stay high in Germany for the coming months, but inflation will only become entrenched if wages start to rise as a reaction to higher prices and a recovering economy," Lindner said. (1 euro = 1.22 U.S. dollars) Enditem