Germany’s Inflation Hits Double Digits for the First Time Since WWII, Parliament Reveals $195B Subsidies Package to ‘Make Prices Drop’ – Economics Bitcoin News

0
11

Following the Covid-19 pandemic, the massive amount of stimulus, and amid the Ukraine-Russia war, Germany’s inflation has soared. Official data from Germany’s consumer price index (CPI) indicates that inflation jumped to a 10.9% annual pace in September and it’s the first time since the end of World War II that Germany has dealt with double-digit inflation.

German Inflation Skyrockets Tapping Double-Digits in September

All across the world, inflation rates have risen a great deal. Many economists believe that the energy crisis in Europe that is tied to the Ukraine-Russia war is one of the main reasons. However, similar to the United States, the U.K. and Europe deployed massive amounts of stimulus packages in order to shore up the economy amid the Covid-19 pandemic. Germany enacted a vast number of stimulus packages in order to fend off the economic fallout from government-enforced business shutdowns and lockdowns.

Germany's Inflation Hits Double Digits for the First Time Since WWII, Parliament Reveals $195B Subsidies Package to 'Make Prices Drop'
German CPI Year-Over-Year. Source: Bloomberg.

On Thursday, Germany’s official CPI data shows the country’s inflation spiked at a 10.9% annual pace in September. Germany’s inflation is up from 8.8% the month prior and it’s the highest inflation rate Germany has seen since 1951, or roughly around the end of the second World War. Inflation came awfully close to double-digits in Germany back in 1999 when the European Union (EU) introduced the euro. Statistics show that Germany’s energy prices are up a whopping 44% in September compared to this time last year.

“The high energy and food prices, which are likely to rise further in the coming year, are causing significant losses in purchasing power,” Torsten Schmidt, the head of economic research at the Leibniz Institute for Economic Research told the New York Times on Thursday.

Germany Led the Pack When It Came to Covid-19 Stimulus Packages and Subsidies, to Combat Rising Prices Parliament Adds Another Package for $195 Billion

In addition to the financial disaster caused by the Ukraine-Russia war, Germany was a leader when it came to ushering out stimulus programs. Between February and May 2020, Germany deployed an $844 billion recovery package with roughly $175 billion for stimulus and $675 billion dedicated to lending. The German government also introduced wage subsidy programs which maintained a threshold of providing 60% of employee wages.

The country also introduced a three-month payment moratorium on German-based consumer loans and at the end of June, the German Parliament ushered in another $146 billion stimulus package. Parliament further created a $56 billion rebate package for German residents who purchased electric cars. While Germany’s red-hot inflation is high and economists believe it derived from a three-pronged problem tied to Covid-19, stimulus, and the war in Europe, German bureaucrats are planning to drop another package of subsidies.

At the same time, German inflation jumped to 10.9%, and members of the German Parliament revealed another package for $195 billion. Germany’s latest subsidy package also placed price limits on natural gas. The German government aims to “cushion rising energy costs and the most severe consequences for consumers and businesses,” officials said on Thursday. “Prices have to come down,” chancellor Olaf Scholz told reporters during a press conference. “To make prices drop, we are rolling out a wide defense shield,” the chancellor added.

Tags in this story
10.9%, 1951, 1999, 44% energy price rise, chancellor Olaf Scholz, consumer price index, Covid-19 pandemic., CPI, economics, Economy, Energy crisis, Europe, German Economy, German government, German Inflation, German Prices, Germany, inflation, packages, parliament, red-hot inflation, stimulus packages, three-pronged problem, Torsten Schmidt, Ukraine-Russia war, WWII

What do you think about German inflation rising to double digits in September? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

bitcoin news india, bitcoin current price in india, bitcoin binance, bitcoin buy india

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here