FRANKFURT, Germany— German consumer price inflation
remained at euro-era high levels in August, preliminary data showed Monday,
climbing slightly to 3.9 percent on the back of one-off effects related to the
coronavirus pandemic.
اضافة اعلان
The end of VAT holiday introduced by the German government
to mitigate the impact of pandemic lockdowns on the economy and the rise in the
price of oil explained some of the increase, according to federal statistics
agency Destatis.
The August 12-month inflation figure was 0.1 percentage
point higher than in the previous month, and the highest value in Europe's top
economy since December 1993, when it came in at 4.3 percent.
"The current increase is likely to remain
temporary," said Fritzi Koehler-Geib, chief economist at public lender
KfW.
A return to inflation under the European Central Bank's
(ECB) two-percent target was likely, she said, but warned that persistent
shortages in key components, such as computer chips, could "impact on
consumers' wallets, as companies are likely to pass on the higher costs at
least partially".
The ECB recently raised its inflation target to two percent,
and said it would tolerate temporary over or undershooting of the target before
stepping in.
Policymakers at the Frankfurt institution will meet next
week to discuss their next moves.
While interest rates are set to remain at historic lows,
high German inflation will fan debate about when the ECB should start removing
some of its vast stimulus for the euro region. Germany is traditionally wary of
inflation for historical reasons.
Extreme hyper-inflation in the early 1920s devastated the
economy and fueled political instability in the fledgling Weimar Republic which
preceded Nazi rule.
Germany has been among the loudest critics of the ECB's
ultra-loose monetary policy.
In a note published last week, the German central bank, the
Bundesbank, said inflation could remain above 2 percent "until
mid-2022".
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