Historical Inflation Rate Comparisons Revealed
In a significant turn of events, prices in Germany are expected to have risen by 3.9% in August 2021, marking the highest values since December 1993, according to the Federal Statistical Office. This surge follows a steady increase since the beginning of the year, with the official inflation rate in July standing at 3.8%.
The rise in prices can be attributed to a combination of factors. Globalization, the transformed retail sector, and new technology have contributed to relatively low prices since December 1993. However, other factors have recently come into play, pushing prices upward.
One such factor is the online trade sector, which has significantly impacted the traditional retail sector since December 1993. The convenience and efficiency offered by online shopping have led to increased competition, driving down prices in the past. However, the shift to online shopping during the pandemic has put pressure on supply chains, leading to price increases.
Another significant factor is the energy market. In August 2021, energy prices rose by 12.6% compared to the previous year. This increase is due to the normalization from extremely low levels in oil and gas prices during the corona crisis in 2020. The rise in energy prices is expected to have a ripple effect, increasing the cost of goods and services across various sectors.
Additionally, the introduction of a CO2 tax on gasoline, diesel, heating oil, and gas has been in effect since the beginning of the year. While the exact impact of this tax on prices is yet to be determined, it is expected that, if other factors remain constant, it would initially increase prices compared to 2020 levels.
Looking back, December 1993 was a pivotal month for several reasons. Not only did the Federal Statistical Office report a 4.3% increase in prices compared to the previous year, a value not seen again for decades, but it was also the month when the compact disc defeated the vinyl record in popularity. It was also the year when Steven Spielberg's dinosaur chase movie, "Jurassic Park," was a box office success, and Intel launched the Pentium processor onto the market.
As we move forward, it is crucial to monitor these trends and understand their implications for consumers and businesses alike. The base effect, where prices normalizing from such low levels can often represent a significant increase, is an important consideration in this context. The Federal Statistical Office will release the official inflation rate for August 2021 in the coming days, providing a clearer picture of the current economic situation.
