Inflation still high: heating oil has become 50 percent more expensive

The high price pressure in Germany eased somewhat in January for the first time in months.

Goods and services cost an average of 4.9 percent more than a year earlier, the Federal Statistical Office confirmed its first estimate on Friday.

In December, the inflation rate, driven by expensive energy, was still 5.3 percent and thus reached the highest value for almost 30 years.

"But it remains at a high level," said the President of the Statistics Office, Georg Thiel, about the development at the beginning of the year.

A so-called base effect provided some relaxation on the price front: Because the prices were no longer compared with those from the second half of 2020, when VAT was temporarily reduced from 19 to 16 percent due to the Corona crisis.

Energy remained the number one price driver: it rose by 20.5 percent after 18.3 percent in December.

Consumers had to pay 24.8 percent more for fuel.

Light heating oil cost 51.9 percent, natural gas 32.2 percent and electricity 11.1 percent more.

"The price rise of energy products has been influenced by several factors," it said.

The CO2 tax, which had risen from EUR 25 to EUR 30 per tonne at the beginning of the year, and higher network charges for electricity had an impact.

"The EEG surcharge, which fell from 6.5 to 3.7 cents per kilowatt hour of electricity, was only able to cushion the price increase slightly," according to the statisticians.

Metals 50 percent more expensive

Inflation for food has weakened: it cost 5.0 percent more, compared to 6.0 percent in December.

Fresh vegetables in particular (+8.3 percent) and dairy products and butter (+6.3 percent) became noticeably more expensive at the beginning of the year.

Services rose by 2.9 percent, net rents by 1.4 percent.

Selling prices in German wholesale rose a little faster again in January.

They increased by an average of 16.2 percent compared to the same month last year, as the Federal Statistical Office also announced on Friday.

That's slightly more than December's 16.1 percent, but less than November's 16.6 percent, the highest figure since calculations began in 1962.

Many raw materials and preliminary products also cost considerably more at the beginning of the year.

There was an increase of 41.9 percent in the wholesale of petroleum products compared to January 2021. Significant surcharges were also reported for ores, metals and semi-finished metals (+50.2 percent) as well as scrap and residues (+47.8 percent).

The wholesale prices for raw and sawn timber (+39.8 percent), chemical products (+34.4 percent), grain, raw tobacco, seeds and animal feed (+29.3 percent) and metal were also significantly higher - and plastic goods for building purposes (+23.8 percent).

The Ifo Institute has significantly raised its inflation forecast for this year due to expensive energy.

At an average of 4.0 percent, consumer prices should increase faster than in 2021 with 3.1 percent.

That would be the strongest increase since 1993, when it was 4.5 percent.

The institute thus raised its old forecast from December, which was still at 3.3 percent.

The reason for the upward correction is also the current Ifo survey, according to which more and more companies want to raise their prices further.