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Inflation: Economists point to statistical outliers


3.9 percent price increase in August: Many consumers are concerned, politicians tried to use the numbers for their purposes in the election campaign. Economists react much more calmly.

Fruit stand in a supermarket

Photo: DPA

The economists of leading financial institutions in Germany currently see no danger of a long-term or even out of control price spiral. "Inflation kicked in in 2021, but it should run out of air again by 2022," said Katharina Utermöhl, an economist at the Allianz Group, in a survey by the dpa news agency. Marc Schattenberg from Deutsche Bank Research explained: "The currently observable increased monthly inflation rates are largely determined by temporary influences." He expects inflation in the euro area to level off around the target of almost two percent set by the European Central Bank over the next few years will.

Veronika Grimm, too, is assuming a normalization of the economy, although the price-driving effects such as the shortage of microchips or the high raw material prices will not, from her point of view, dissolve as quickly as hoped. "As long as wage settlements remain moderate, there's not much to suggest that we're running into permanent inflation," she said. "In some areas, wages can certainly rise, for example due to the shortage of skilled workers, but the temporarily high rates of inflation should not be taken up 1: 1 in the collective bargaining."

In August the inflation rate in Germany was 3.9 percent.

However, this is also due to base and special effects, because inflation was particularly low last year at 0.5 percent, primarily due to the effects of the corona pandemic.

Among other things, the temporarily lowered VAT alone ensured a lower price increase.

Lively demand

In order to get into a galloping price surge, other effects would have to take effect, such as a price-wage spiral, said Katharina Utermöhl.

"This is not in sight," she emphasized.

"I currently see no reason why a visit to a restaurant should cost more in the medium term."

Economists expect German economic output to increase by a good three percent for the current year. "In the next year we expect an even stronger growth of 4.3 percent," said Schattenberg. "Demand from private households is already brisk, but there is still pent-up purchasing power," emphasized the expert from Deutsche Bank Research. "We can also see that short-time work has fallen sharply over the summer."

Overall, the labor market should have developed positively in September, said Schattenberg.

The number of unemployed could fall again by around 110,000, seasonally adjusted by 30,000.

The Federal Employment Agency will announce its September figures on September 30th.

In August around 2.58 million people nationwide were out of work.

The unemployment rate was 5.6 percent.

Lack of manpower

Fritzi Köhler-Geib, chief economist at the state-owned banking group KfW, also predicts positive developments on the labor market.

"In 2022, the strong recovery on the labor market will likely be fully reflected in the figures: According to our forecast, we will have half a million more people in employment than this year, and the unemployment rate is likely to be considerably lower at 5.3 percent," she stressed.

It could already fall to 5.7 percent this year - but only if there are no further restrictions, at least for those who have been vaccinated, in the wake of the corona pandemic.

more on the subject

  • For the first time since the beginning of the pandemic: Norwegian central bank raises key interest rate

  • Statement by the US Federal Reserve: Fed indicates a change of course in monetary policy

  • Social association: "Fruit and vegetables are finally becoming a luxury for low-wage earners"

  • After the corona crisis: high inflation dampens real wage growth

Veronika Grimm, a member of the Federal Government's Advisory Council, also sees limiting factors for the economy in the labor market - for example, when it comes to supplying companies with specialists.

"There was almost no immigration to the corona crisis," she said.

This has led to a labor shortage in some industries such as the hotel and restaurant industry.

Employees have also reoriented themselves, for example in the direction of retail, and are therefore no longer available in the hospitality industry.

"The employers will also have to improve their wages," stressed Grimm with a view to possibly better pay and working conditions.

With regard to economic performance, the professor does not believe that there will be a quick full recovery from the consequences of the corona pandemic.

"I think we're going to keep some kind of 90 percent boom in the services sector," she said.

mik / dpa

Source: spiegel

All business articles on 2021-09-26

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