Inflation in Germany jumped to a record high in May.
Rising prices hit the poor hardest. 77% of respondents are driven by the need to cut their budget. At the same time, 47% of German citizens have to reduce their living expenses amid soaring food and electricity prices.
Moreover, low-income families had to revise their budgets. German citizens associate the current situation with the Russia-Ukraine conflict. 37% of respondents consider it the key political issue. 23% of German citizens think the price hike is of crucial importance, 22% of them focus on climate change and environmental problems, and 16% of respondents pay attention to social injustice.
Currently, 59% of Germans do not approve of the government’s actions, while 39% of citizens are positive about them. German Economy Minister Robert Habeck and German Foreign Minister Annalena Baerbock had a high level of approval.
According to preliminary estimates of the Federal Statistical Office of Germany, inflation in the country totaled 7.9% year-on-year in May. Previously, such high figures were recorded in 1973-1974, almost half a century ago. A rise in energy costs by 38.3% had a huge impact on inflation. At the same time, food prices increased by 11.1% and service prices dropped slightly from 3.2% to 2.9%.
Co-President of Deutsche Bank Karl von Rohr said that inflation in Germany would remain at 7%-8% in 2022. He believes that if the EU limits Russian energy imports dramatically, inflation will exceed 10%. This scenario is possible in case the EU imposes a total ban on Russian oil imports.
Earlier, the EU authorities adopted the sixth package of anti-Russian sanctions. A ban on Russian raw materials will most likely be gradual. The EU members will have six months to phase out crude oil and eight months to cut other refined petroleum products. Temporary exemptions are provided for countries that are highly dependent on Russia’s energy supplies due to their geographic location.
