German consumer prices rose strongly in 2021, posting their highest annual reading since 1993, statistics office Destatis said Wednesday.
Consumer prices in Germany rose 3.1% on average in 2021 compared with 2020. The inflation rate in the previous year was 0.5%.
The increase in the inflation rate was caused mainly by base effects due to lower prices in 2020, Georg Thiel, president of the federal statistical office, said. In this context, the temporary reduction in the value added tax and the sharp decline in mineral-oil product prices also had an upward effect on the overall inflation rate, Mr. Thiel said.
“In addition to the temporary base effects of the past, there are more and more crisis-related effects such as delivery bottlenecks and marked price increases at upstream stages in the economic process,” Mr. Thiel said.
In December, consumer prices rose 5.3% on year measured by national standards, reaching its highest level in 2021 at the end of the year, in line with forecast by economists polled by The Wall Street Journal. They rose 5.7% on year by European Union-harmonized standards, also in line with forecasts.
Consumer prices rose 0.5% on month by national standards and 0.3% by EU-harmonized standards, both in line with forecasts.
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