Tuesday, October 12, 2021
Highest inflation in 47 years
Wholesale prices are going through the roof
Many products cost significantly more than they did a year ago. This is not only felt by the end consumer when shopping in his wallet. Prices are also rising sharply in wholesale. There are several reasons for this.
The sales prices in German wholesaling rose more sharply in September than they have done in over 47 years. They were 13.2 percent higher than a year earlier, according to the Federal Statistical Office. The last time there was a stronger increase was in June 1974, when prices rose by 13.3 percent in the wake of the first oil crisis. As a result, the upswing accelerated again significantly: in August the rate of inflation was 12.3 percent and in July 11.3 percent.
The development is an indicator for future inflation tendencies, since wholesaling is the hinge between manufacturers and end customers. At 4.1 percent, the inflation rate is currently higher than it has been since 1993 and, according to experts, should continue to move towards five percent by the end of the year.
“The high rise in wholesale prices compared to September 2020 is due, on the one hand, to the current sharp rise in prices for many raw materials and intermediate products,” explained the statisticians. “On the other hand, there is a base effect due to the very low price level in the previous months in connection with the Corona crisis.”
According to the information, a strong price driver was the development of ores, metals and metal intermediate products: they rose by 62.8 percent. Petroleum products cost 42.3 percent more than a year ago. There were also particularly strong increases in the wholesale of scrap and residual materials (+84.6 percent) as well as with raw and sawn timber (+54.6 percent). Grain, raw tobacco, seeds and animal feed also became considerably more expensive (+23.9 percent).
Due to the rapid recovery of the global economy from the Corona recession, the prices for many products are currently rising rapidly. The world’s largest economies, the USA and China, in particular, are forecast to experience strong growth this year, especially as major economic stimulus programs have been launched there.