Ongoing drought in Europe is causing rivers to dry up and crops to fail. Transport costs are rising and the price of food has exploded. Is inflation due to extreme weather?
So far, research institutes have not been able to quantify the impact of extreme weather conditions on inflation in Germany, but there are clear trends.
"If ships on the Rhine can only carry a fraction of their usual cargo, transport costs per metric ton will rise significantly," Torsten Schmidt, an economist at the RWI – Leibniz Institute for Economic Research, told DW.
He added that this would drive up the cost of energy sources, such as diesel and heating oil, which are in large part transported by water. He said that higher costs would be passed on to consumers.
For its data, the Food and Agriculture Organization of the United Nations (FAO) takes into account the effects of global warming, extreme weather and crop losses.
