It Is Falsely Claimed that Inflation in Germany Is Over 45 Percent
The post spreads falsehoods that the real inflation in Germany is over 45 percent, and as “proof” an illustration shows that an economic index for April is 45.8 percent. However, this index does not show inflation, it is a completely different indicator. As it says on the photo itself, it is the Producer Price Index (PPI), which measures the rate of change in the prices of sold products when they leave the manufacturer. The index used to measure inflation is called the Consumer Price Index (CPI) and it measures the average change in the retail prices of goods and services from the consumer basket of households. Official data says that the inflation rate in Germany for August 2022 is 7.9 percent, i.e. it had an increase of 0.4 percent compared to the previous month when inflation was measured at 7.5 percent
THE WEST HAS LEADERS …
Inflation in Germany continues to grow!
Forecast: 37.1% -> Actual 45.8%
Attached to the post claiming that real inflation in Germany is 45.8 percent, as proof that the number is accurate and real, is an illustration that actually shows an economic index for April with 45.8 percent.
However, it is not true that this index shows inflation. This completely different index shows a different condition. Namely, as it says on the photo itself, it actually shows the Producer Price Index (PPI).
This index measures the rate of change in the prices of products sold as they leave the manufacturer. The producer price index for industrial products (domestic sales) measures the average change in the prices of raw materials and industrial products produced and sold in Germany. Examples of these include petroleum products, metals, basic chemicals and food products. The producers of these goods belong to the manufacturing sector, the energy, water supply sector, and the mining sector.
Inflation, on the other hand, is something completely different. The index used to measure inflation is called the Consumer Price Index (CPI). This index measures the average change in retail prices of goods and services that households buy for their consumption needs. These include, for example, food products, other consumer goods, housing rents, electricity, fuels and services.
In Germany, the most important categories in the consumer price index are housing, water, electricity, gas and other fuels (32 percent of the total weight), transport (13 percent), recreation, entertainment and culture (11 percent), and food and soft drinks (10 percent). The index also includes miscellaneous goods and services (7 percent), furniture, lighting equipment, appliances and other household equipment (5 percent), restaurant and lodging services (5 percent), health (5 percent), and clothing and footwear (5 percent). The remaining 7 percent of the index is made up of alcoholic beverages and tobacco, communication and education.
Official data says that the inflation rate in Germany for August 2022 is 7.9 percent, that is, it had an increase of 0.4 percent compared to the previous month when inflation was measured at 7.5 percent.
This is completely different from the index of wholesale prices of products, which in August 2022 was 45.8 percent at the annual level, with an increase of 8.6 percent at the monthly level, so compared to July 2022, when this index grew to the level of 37.2 percent compared to July 2021.
There is no doubt that the wholesale price index affects inflation. Experts announce that the increase in this index means that inflation will also increase and that in the next few months it may reach up to 10 percent.
Rising energy prices due to Russia’s war against Ukraine remain the main driver behind rising prices, Politico reports.
However, none of this can lead to the conclusion that inflation in Germany is 45.8 percent. The Facebook post under review manipulates data and tricks the public into believing something that is not true. Moreover, the very phrase “the West has leaders” alludes to the fact that inflation (which is falsely represented as enormous) is the result of bad leadership in Western countries. However, inflation depends on and is related to many other factors, and above all, it is due to the energy crisis caused by Russia’s military invasion of Ukraine.