According to industry group HDE, German retailers should be able to raise nominal revenues by 3% on average in 2022, but cost-adjusted sales would likely stall due to rising inflation. The boost will primarily come from online shopping, which is expected to grow 13.5 percent this year compared to 1.2 percent for physical shopping, according to HDE in a statement, noting that major retail chains will likely benefit more than smaller businesses.

Average German Inflation Rates

From 1950 to 2022, Germany's inflation rate averaged 2.37 percent, with an all-time high of 11.54 percent in October 1951 and a record low of -7.62 percent in June 1950. According to a preliminary forecast, Germany's consumer price inflation rate would reach 7.3 percent in March 2022, the highest since 1981 and far higher than market expectations of 6.3 percent. Natural gas and mineral oil prices have also risen sharply since Russia's invasion of Ukraine, putting pressure on the country's high inflation rate.

Delivery constraints caused by supply chain disruptions as a result of the Covid-19 pandemic, as well as significant rises in energy product costs at upstream stages in the economic process are all additional elements in the present reference month. Energy items (39.5 percent vs. 22.5 percent in February), food (6.2 percent vs. 5.3 percent), and services are expected to exert the most upward pressure (2.8 percent, the same as in the previous month). Consumer prices were predicted to climb 2.5 percent on a monthly basis in March as well.

Future Forecast

Germany's inflation rate is predicted to be 2.30 percent by the year 2026 according to Statista. According to custom econometric models, long-term inflation in Germany will be approximately 2.10 percent in 2023 and 1.90 percent in 2024.

Housing, water, electricity, gas and other fuels, transportation, recreation, entertainment and culture, and food and non-alcoholic drinks (11 percent) are the most important categories in the consumer price index in Germany. As a result, these are currently the most important key indicators of inflation in Germany's industries.

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