Germany’s consumer price inflation accelerated the most since 1993, largely driven by higher energy prices, preliminary data from Destatis showed on Thursday.
Consumer price inflation advanced to 4.5 percent in October from 4.1 percent in September. The rate was also above economists’ forecast of 4.4 percent. A similar higher price growth was last seen in October 1993.
The harmonized index of consumer prices grew 4.6 percent on year after climbing 4.1 percent in September. The expected rate was 4.5 percent. Final data is due on November 10.
Prices of goods increased 7 percent, following a 6.1 percent rise in September. Meanwhile, growth in services eased marginally to 2.4 percent from 2.5 percent.
Energy prices surged 18.6 percent from the last year and food prices were up 4.4 percent.
On a monthly basis, consumer prices and harmonized prices gained 0.5 percent each in October. Monthly consumer price inflation matched the flash estimate, while harmonized consumer prices were expected to grow moderately by 0.4 percent.
Elsewhere, the German Chamber of Commerce and Industry, DIHK downgraded its growth outlook for this year to 2.3 percent from 3.0 percent. The economy is projected to grow 3.6 percent in 2022.
The DIHK said the situation is good at the moment, but the outlook is disappointing. The lobby does not expect a sustainable, investment-driven upturn.
According to the DIHK survey, companies estimate their current business situation much better than they did in early summer. However, expectations for the next twelve months are lower than would be necessary for a sustainable catch-up process.
Monthly data released by the Federal Labor Agency, earlier in the day, showed that the number of people out of work decreased by 39,000 in October after falling 31,000 in September. This was bigger than the economists’ forecast of -20,000.
The jobless rate fell to 5.4 percent in October, in line with expectations, from 5.5 percent in September.