NEWS DESK
Inflation in Germany surged to 3.8% in July, compared to the same time last year, according to the country’s Federal Statistical Office on Thursday.
This was the first time since August 2008 that the annual inflation rate in Europe’s largest economy rose to above 3%.
On a month-on-month basis, prices rose by 0.9% from June to July. Destatis, the German name for the statistics institute, calculated the number based on a preliminary calculation.
Destatis said one factor was a six-month sales tax cut in 2020 that showed up in the data for the first time. Amid falling consumer demand during the coronavirus pandemic, the government cut its VAT rates to 16% and 5% in the second half of 2020, from previously 19% and 7%.
The previous rates were restored at the beginning of the year as businesses reopened.
Another factor is energy prices. These have been rising faster than the general average for months now. In addition, consumers burning fossil fuels have had to pay €25 ($29.70) per ton of CO2 emitted since January.