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At the gas pump (symbol picture): The fuel prices are currently an important factor in inflation
Photo: Monika Skolimowska / dpa
The inflation rate in Germany is higher than it has been in decades and, according to the Bundesbank, consumer prices are likely to continue to rise strongly.
In its current monthly report, the central bank is anticipating an increase to just under six percent in November - and that the economy will generally be worse again.
In its inflation forecast, the Bundesbank refers to an expected jump in the harmonized consumer price index, which the ECB uses for its monetary policy.
The Federal Statistical Office last determined comparable inflation rates in 1992 using the consumer price index, which is only measured for German purposes.
In October of this year, rising energy prices in particular drove inflation.
The Bundesbank attributes part of the increase in consumer prices to special effects such as the temporary reduction in VAT in Germany due to the corona crisis from summer 2020.
The old tax rates have been in effect again since the beginning of this year.
The special effect from VAT will no longer apply from January 2022.
"Then the inflation rate should drop noticeably, although the strong rise in market prices for natural gas will probably only be passed on to consumers for the most part after the turn of the year," writes the central bank.
Average consumption per household and month falls to 2507 euros
The experts still anticipate that the rate of inflation will gradually decrease in the coming months of the coming year.
"But it could stay well over three percent for a long time." The head of the European Central Bank, Christine Lagarde, had previously warned that inflation in Europe could last longer than expected.
In view of this situation, the Bundesbank is critical of the traffic light partners' plans to increase the minimum wage to twelve euros per hour towards the end of 2022. This would have "non-negligible spill-over effects" on the higher wage groups, explained the Bundesbank. "This is also likely to increase wage pressure in the future." Behind this is concern about a spiral of rising prices and rising wages, for which economists have not yet seen any signs.
According to the Bundesbank, the economic upheavals due to the corona pandemic, such as delivery bottlenecks and the increasing number of infections in many places, are having a greater impact on the economy than expected at the end of the year.
"The economic recovery will probably take a breather first," wrote the central bank.
The gross domestic product could stagnate in the fourth quarter.
In the summer, according to preliminary data, Europe's largest economy grew by 1.8 percent compared to the second quarter.
Above all, the consumer's propensity to consume had contributed to this.
According to the Bundesbank, the surge in growth that came from the service sector after the end of many corona restrictions has largely expired for the time being.
Some corona measures have also been tightened again in view of the increasing number of infections.
At the same time, the industry is likely to suffer from delivery bottlenecks in the fourth quarter and thus dampen overall economic growth.
According to the central bank, a positive growth impulse is emanating from the construction industry.
According to the Federal Statistical Office, in the Corona year 2020, monthly consumer spending by private households fell by three percent compared to the previous year to an average of 2507 euros.
Shutdowns and restrictions on the number of people, for example in leisure and service facilities, led to a decline.
Overall, the Bundesbank sees risks from an intensified pandemic throughout the winter half-year.
"As things stand at present, the macroeconomic effects are likely to be less severe than in previous pandemic waves."
apr / dpa
