SHARE
COPY LINK

ECONOMY

Dairy prices up by 32 percent in a year

Consumers have been hit by major price rises for basic foodstuffs such as milk and potatoes, figures released on Monday showed. The cost of butter has risen by 32 percent in a year.

Dairy prices up by 32 percent in a year
Photo: DPA

Dairies, bakeries and other food producers increased their prices by an average of 2.7 compared to September last year, the Federal Office of Statistics said.

Butter and milk showed the most striking price rises, increasing by 32.1 percent and 18.2 percent, while cheese and yogurt also cost 8.8 percent more over the 12 months.

Prices for dairy products have varied a lot in recent years, however, with prices in autumn 2007 and autumn 2011 having stood at a similar level to now.

Wine costs 7.5 percent more, while potatoes have gone up by 6.4 percent. Bread prices have also gone up 2.9 percent.

However, some key products have actually fallen in price, Focus reported. Coffee prices are down 2.5 percent, whilst meat, excluding poultry, is on average 2.4 percent cheaper.

August saw an average price rise of 3.7 percent, and in July it was 4.1 percent.

The “producer price” statistics measure the price of the goods as they leave the manufacturer, before they enter the market, so they can be used as an indicator of how consumer prices are likely to develop.

In contrast, the overall average “producer price” of goods, including metal, wood products and energy, fell by 0.5 percent compared to September last year.

READ MORE: German retailers embrace ugly fruit

The Local/atje

Follow us on Twitter @thelocalgermany

Like The Local Germany on Facebook

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

READ ALSO:

With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

SHOW COMMENTS