New statistics show large increase in cost of living
Statistics issued by the German government show that fuel prices are pushing a general rise in the cost of living in Germany
Wiesbaden -- Germany's inflation rate in May surged to 3.0 per cent year on year as record oil prices pushed up the cost of the standard household's "basket" of goods, federal statisticians said Wednesday, prompting experts to warn against financial hysteria and panic buying.
The Wiesbaden-based Federal Statistics Office said prices rose 0.6 percent month on month, with the key rises being jumps in the cost of heating oil for buildings and diesel fuel for cars.
Climbing fuel prices have been affecting the price of products across the market, not just fuel itself. Petrol and diesel in Germany are now retailing at over 1 euro 50 per litre. From April into May petrol prices have risen by 8,7 percent, according to Focus magazine.
The German state Bundesbank expects inflation to reach its highest rate in 15 years by the end of 2008 and experts are warning of hysteria due to the unfortunate combination of high interest rates and soaring fuel prices.
Ulrich Kalter from Germany's Dekabank told press, "The current hysteria is disproportionate, this is not as bad as in the 1970s or even the 1990s."
The provisional figure released by the state was based on the monthly sample from the biggest German states, which is usually confirmed later when data from all 16 states comes in. The April inflation rate in Germany had been 2.4 percent.
The rising cost of living is bad news for Germany's poorest. It was recently estimated that one in eight Germans live in poverty, with a further one in eight struggling to stay above the poverty line.