Inflation has not yet had a complete impact on the purchasing power of the German population. The gross domestic product of Europe’s largest economy rose in the third quarter, driven mainly by consumer demand, according to the German Ifo Institute.
The annual inflation rate in Germany reached 11.6 percent in October, according to a preliminary estimate by the Federal Statistical Office. This is 0.7 percentage points higher than in September. The majority analysts’ estimate assumed the same inflation rate as in September, Reuters reported.
Food in particular has become more expensive
The significant acceleration in inflation was mainly due to rising food prices. Their prices increased by 20.3 percent year-on-year. Although energy still dominated the price growth rate, its price increase slowed down in October compared to September.
The population’s purchasing power is not at risk
Although German inflation is at its highest level since the end of the Second World War, it has not yet had a significant negative impact on the population’s purchasing power. This is confirmed by the economic growth figures for the third quarter of this year. According to the Ifo Institute, the German economy expanded by 1.2 per cent year-on-year and 0.3 per cent quarter-on-quarter, mainly thanks to growth in domestic demand. In the remaining quarter of this year, however, Ifo analysts are forecasting a contraction of 0.6 percent.
