Consumer prices have been rising significantly for months in Germany, with record statistics expected for the past year.
The Federal Statistical Office is due to release an initial estimate for inflation in December and throughout 2021 on Thursday, with economists expecting the levels to be the highest since the early 1990s.
Higher inflation weakens consumers' purchasing power because they can buy less for 1 euro than before, while rising inflation rates hurt savers.
Inflation in Europe's largest economy was fuelled last year primarily by rapidly rising energy prices as the economy recovered from the effects of the pandemic in 2020.
However the end of a temporary reduction in value-added tax has also meant prices have risen year-on-year.
Prices have further been driven upwards by material shortages and supply bottlenecks due to the pandemic.
Furthermore, Germany's carbon dioxide levy of 25 euros per metric ton of the gas emitted when diesel, gasoline, heating oil and natural gas are burned was introduced at the beginning of 2021 and also drive up energy prices.
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