OPINION
Market Rating Before FOMC MeetingJan 31
Highest Inflation in Germany in 70 Years
In Germany's inflation, which has reached the peak in 70 years, in the groups with the highest annualized increase, respectively; Transportation took the lead with 16.3 percent, followed by food and non-alcoholic beverages with 10.7 percent, electricity, water, and gas at 9.2 percent and accommodation at 7.2 percent. In the sub-items of the transportation group, it was noteworthy that fuel oil increased by 41.0 percent and natural gas increased by 55.2 percent.
When looked at on a monthly basis, the highest increase was recorded in food and non-alcoholic beverages at the level of 2.1 percent. Accommodation with 1.2 percent, transportation at 1.2 percent, and household goods at 1.0 percent, respectively, were the groups with the highest increase.
In the report released by Destatis today, it is clear that Germany's consumer inflation, which is approaching its all-time peak, is the main reason for the increase in energy and food prices. At this point, it is understood that the price increases due to the rise in agricultural commodities, especially oil, spread in international markets with the reflections of the Russia-Ukraine war.
On the other hand, the core CPI, which reached 3.80 percent in May, indicates that upside risks in the inflation outlook remain in the near term. Although the European Central Bank (ECB), which argues that the inflationary pressures stemming from the pandemic are temporary and hesitates to end monetary stimulus in order to evaluate the effects of the war in Ukraine, joins the global policy tightening cycle, we evaluate that the peak in inflation in the region has not yet been seen.
