Why prices have risen so sharply in west and east Germany

This year the increase in consumer prices has accelerated clearly. Measured in terms of the price index for the cost of living of all private households, prices in all of Germany rose by 3.5% in May 2001. In regional terms, the cost of living increased in western Germany by 3.4% and in eastern Germany by 3.8%. During the further course of the year, the increase in consumer prices will be more moderate so that average annual inflation for the year will be 2¾% (in western Germany +2¾%; in eastern Germany +3%). Not until 2002 will inflation in Germany fall below the 2% level.