German retail sales, industrial output fall

- Advertisement -

BERLIN- Data showed inflation’s tightening stranglehold on the German economy, with a surge in import prices and falls in industrial output and retail sales adding to signs that Europe’s biggest economy is heading for recession.

Import prices for energy were up 162.4 percent in August compared with the same month in 2021, with prices of natural gas up a whopping 306.3 percent year-on-year as the fallout from Russia’s war on Ukraine continued to upend European energy markets.

Data last month showed German inflation was at its highest in more than a quarter of a century in September, driven primarily by high energy costs.

- Advertisement -spot_img

That is disrupting activity in an industrial sector already grappling with supply chain problems and pushing up costs for retailers, which are struggling to pass them on to cash-strapped shoppers.

Industrial output in August saw a month-on-month drop of 0.8 percent, the sharpest fall since March, the first full month of Russia’s invasion of Ukraine, the statistics office said.

Meanwhile, consumers were particularly reluctant to spend on food in August, the office said, with retail food sales down 1.7 percent on the month and down 3.1 percent on the year – the lowest in more than five years.

“When looking into their wallets, many consumers will continue to put the brakes on spending,” said Alexander Krueger, economist at private bank Hauck Aufhaeuser.

With sky-high energy prices weighing on both consumers and industry, an economic recession seems inevitable, said ING economist Carsten Brzeski.

Author

Share post: