German Import Prices Surge Most in Four Decades on Supply Woes
Germany is seeing its biggest surge in imported inflation since the early 1980s, putting a price tag on the difficulties businesses are facing to secure inputs amid a worsening supply squeeze.
In July, goods arriving in the country from abroad were 15% more expensive than a year ago, data published Friday show. The cost of basic goods increased about 19% and energy jumped nearly 90%. The latter reflects a slump in prices in 2020 when the pandemic shut down the economy and eroded demand.
With shipping disrupted by resurgent coronavirus infections and port closures, manufacturers in particular are struggling to keep up, and are increasingly passing on higher costs to customers.
Consumer prices probably accelerated 3.4% this month, according to a survey ahead of data on Monday. That’s well above the European Central Bank’s 2% target for the euro area, though policy makers say the current spike will be temporary.
The fraying of global supply chains is weighing on the prospects of the world’s economic recovery.
In Germany, Europe’s largest economy, it has caused business confidence to drop for a second month in August, fueling concerns that upbeat growth forecasts for this year may be revised lower. The country’s central bank predicted an expansion of 3.7% in June.
©2021 Bloomberg L.P.