Germany’s import price inflation at highest since 1974

Germany’s import price inflation accelerated sharply in March to its highest level in nearly five decades as data began to reflect the impact of war in Ukraine.

Import prices rose 31.2% year-on-year after rising 26.3% in February, preliminary data from Destatis showed on Friday. Economists had forecast inflation of 28.6%. In January, import prices increased by 26.9%.

The latest inflation rate was the highest since September 1974 during the first oil crisis, when import prices jumped 32.6% a year, Destatis said.

On a monthly basis, import prices rose 5.7% in March 2022, faster than economists’ forecast of 3.4%.

Energy import prices soared 160.5% a year in March, led by a 304.3% jump in natural gas prices and an 81.3% increase in crude oil prices.

The import price index, excluding crude oil and petroleum products, rose 26.6% year on year in March and 4.1% from the previous month.

Export prices rose 15.9% year-on-year in March after rising 12.4% the previous month. The rate was the highest since November 1973 during the first oil crisis, when it was 16.8%.

Energy prices have risen sharply since the war in Ukraine, which strongly influences inflation across the region, as many European countries depend on gas and oil supplies from Russia. The upward trend in energy prices is expected to continue for some time.

Several European countries including Germany are trying to reduce their dependence on Russian gas.

This week, state-owned Gazprom shut off gas supplies to Poland and Bulgaria, and Moscow demanded European customers of its energy pay in rubles, sparking an outcry.

Most of Germany’s inflation indicators have hit new highs in recent months amid runaway energy prices and supply bottlenecks due to war and a resurgence of coronavirus in some parts of the world.

Official data showed on Thursday that German consumer price inflation unexpectedly accelerated further in April to 7.4%, a new high in more than four decades. Producer price inflation hit a record high of 30.9% in March.

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