German consumer prices hit 29-year high in November

German consumer prices hit a 29-year high in November, preliminary data showed Monday, as soaring energy costs and supply chain bottlenecks weigh on Europe's top economy.

Woman shopping in German supermarket
A customer walks through the aisles of a supermarket in Haßloch, Rhineland-Palatinate. Photo: picture alliance/dpa | Uwe Anspach

The annual inflation rate rose to 5.2 percent, accelerating for the fifth month in a row, with the surge partially driven by a 22-percent jump in energy prices, federal statistics agency Destatis said.

In October, prices had climbed by 4.5 percent year-on-year.

Germany’s central bank said earlier this month that German inflation could spike to just under six percent this year.

The higher cost of living is being experienced across the eurozone at the moment, putting pressure on the European Central Bank to tighten its ultra-loose monetary policy.

The ECB has so far insisted that the inflation surge in the 19-nation zone is transitory, and is wary of acting too soon and potentially stifling the pandemic recovery.

But Bundesbank chief Jens Weidmann, who is stepping down at the end of the year, has warned that the price hikes could last longer than expected.

Using the ECB’s preferred yardstick, the Harmonised Index of Consumer Prices (HICP), German inflation jumped to six percent in November — well above the bank’s two-percent target.

Higher demand after the easing of coronavirus restrictions has pushed up energy prices and led to shortages of key materials and labour around the world.

But Germany also suffers from the comparison effect with 2020, when the country introduced a temporary sales tax cut, as well as the introduction of CO2 pricing at the start of 2021, according to Destatis.


Carsten Brzeski, economist at ING Diba bank, called November’s inflation figure “a shocker” but said the peak had yet to come.

“The December inflation number could be a new record high since German reunification,” he said. “One-off factors like base effects from higher energy prices and post-lockdown price mark-ups” will “gradually start to abate”, he added.

“However, it could take until the end of 2022 before headline inflation will drop below two percent, if not until 2023.”

Member comments

  1. There is no such thing as transitory inflation. Just inflation. Look at the producer prices index. Look at what’s coming down the pipeline . And then imagine that there won’t be any wage inflation to keep the whole process fuelled. Finally, imagine that inflation in the other Eurozone countries doesn’t let rip. The ECB won’t deal with it because its bankrupt members can’t afford the measures it needs to take . Make sure your pension is index-linked and buy a good wheelbarrow.

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How do the Swiss manage to save more money than other Europeans?

Despite higher, inflation-driven prices for many consumer goods, households in Switzerland are putting aside more money at the end of each month than their European counterparts, a new study shows.

How do the Swiss manage to save more money than other Europeans?

Even though a recent survey found that about a fifth of Switzerland’s population can’t make ends meet and need more than one job to pay their bills, another one indicates that on average, the Swiss still manage to save more money than other Europeans. 

This is what emerges from the new study from HelloSafe consumer platform. It is based its findings on 2021 -2022 figures (the latest available to date), culled from the database of Organisation for Economic Cooperation and Development (OECD).

Savings rates in the study are expressed as a percentage of GDP (gross domestic product), comprising all the savings held by households in relation to the GDP of each country.

The findings are clear: Swiss households are saving nearly 22 percent of their income, while the European Union recorded an average savings rate of 10.3 percent — that is, 11.6 points below the average Swiss rate.

For instance, looking at just Switzerland’s four immediate neighbours, the rate is 12.8 percent in France, 12 percent in Austria, 11.4 percent in Germany, and 2.1 percent in Italy.

Long-term pattern

The fact that the Swiss are European savings champions is not a new phenomenon. 

OECD figures for the past decade show that Switzerland’s population has far outperformed the EU in this area.

Interestingly, as the chart indicates, most savings, both in Switzerland and elsewhere in Europe, were accumulated in 2020, for an obvious reason that at least during some parts of the Covid pandemic, money spending opportunities were largely limited.

Why do the Swiss manage to put away more money than other Europeans?

You might think it is because the wages here are higher than elsewhere, and you are right — income does play a role, even though the cost of living is also correspondingly higher in Switzerland.

However some studies have shown that, taking into account the country’s inflation rate (which is lower than many other European countries), high employment, and strong economy, the purchasing power parity (PPP) — the financial ability of a person or a household to buy products and services with their wages — is higher in Switzerland than in the EU.

READ ALSO: Do wages in Switzerland make up for the high cost of living?

Another OECD study has demonstrated that Switzerland’s average household disposable income per capita is higher than the OECD average. This means that while the Swiss have more money to spend, they also have more to save, if they so choose.

This brings us to yet another reason which explains the savings phenomenon as well.

It has more to do with Swiss mentality and attitude to financial stability, which Alexandre Desoutter, HelloSafe’s editor-in-chief, calls “a prudent and responsible behaviour” towards money.

“Switzerland stands out with a high household savings rate, reflecting its solid financial culture and its commitment to economic stability,” he said.