Germany faces its biggest crisis since the 1950s.
In October, more and more information is emerging about Germany’s final inclination away from neutrality in the war in Ukraine toward its full support. Beginning with the deployment of the U.S. Central Command on its territory and the transfer of intelligence information to the SSU and MDI of Ukraine, to the transfer of actual weapons (Iris-T air defense) – all this expresses the real position of Berlin at the moment.
At the same time, against this background, as well as from the very beginning of Russia’s special operation, the welfare of European countries, and Germany in particular, is gradually deteriorating. Record inflation is contributing to everyone’s unease.
Changes in price indices in Germany from 1970 to the present
Back in September 2022, the producer price index for industrial products was up 45.8% compared to September 2021. As reported by the Federal Statistical Office (Destatis), this was the same increase compared with the same month of the previous year as in August. In July, the increase had been +37.2%. Compared with the preceding month, August 2022, the overall index rose by 2.3% in September 2022 and thus increased less strongly than in August (+7.9% compared to July 2022).
The rise in energy prices still was mainly responsible for the increase in producer prices compared to September 2021, due to the high weighting percentage combined with exceptionally high changes. Moreover, prices also rose significantly for intermediate goods (+16.8%) and capital goods (+7.8%) as well as for durable and non-durable consumer goods (10.9% and 18.3%, respectively).
Energy: industry pays more than three and a half times more for natural gas than a year earlier
Energy prices as a whole were up by 132.2% compared to September 2021. The strong rise in energy prices was mainly due to the large price increases for natural gas (distribution), which was up by 192.4%, and for electricity (+158.3%).
Electricity redistributors had to pay 259.8% more than in September 2021, special contract customers 148.9%. Prices for small commercial customers, who often conclude tariff-bound contracts, rose by 17.4%. Compared with August 2022, electricity prices increased by 3.5% for all customers.
Prices of natural gas (distribution) were up 192.4% on September 2021. Industrial consumers had to pay 264.8% more for natural gas than in the previous year. The prices paid by power plants were up by 233.1%, those for resellers by 199.9%. The prices for buyers of smaller quantities rose less strongly, but approximately doubled. Across all customer groups, natural gas became 6.6% more expensive compared to August 2022.
Prices of mineral oil products were up 42.9% on September 2021 and rose by 5.9% from August 2022. Prices of light heating increased by 84.4% compared to September 2021, those of motor fuels were up 38.6%.
The overall index disregarding energy was 14.0% up on September 2021 (+0.4% compared to August 2022).
Significant price increase for intermediate goods, especially regarding metals and chemical precursors
Prices of intermediate goods increased by 16.8% compared to September 2021. Compared to August 2022, these prices fell slightly by 0.1%. The price increase for intermediate goods compared with September 2021 was mainly due to the price development of metals (+18.1%). Compared to August 2022, these prices fell by 0.3%. Prices of metallic steel and ferro-alloys increased by 19.8% compared to September 2021. Prices of non-ferrous metals were up by 15.0% on September 2021.
Prices of basic chemicals, fertilisers and nitrogen compounds increased by 33.5% compared to September 2021. Especially high increases were observed in the prices of fertilisers and nitrogen compounds (+113.5 %). The price of ammoniac, which is used for the production of fertilisers, was up 208.7%.
The prices of goods in the “commodity bundle” have also increased significantly
From September 2021 to September 2022, food prices increased by 24.2%. Especially high price increases were observed for butter (+72.2% compared to September 2021), meat of swine (+46.3%), and cheese and curd (+39.7%). Crude vegetable oil prices rose by 35.7%. Coffee prices were up 32.0%.
Inflation figures as well as Ukrainian refugees arriving in Germany give ordinary Germans no reason to live peacefully today. Should Scholz and company be worried? Ask Johnson and Truss.