Ifo expects the highest inflation rate for almost 30 years

Munich (dpa) – This year, the Ifo Institute is expecting 3 percent to be the highest increase in consumer prices in almost 30 years.

For the coming year, the Munich economists predict an inflation rate between 2 and 2.5 percent, as the institute announced. That would also be a significantly faster price increase than the average of the past ten years.

According to the Ifo Institute, the comparatively high inflation this year is largely due to the Corona crisis: Last year, the energy prices were due to the crisis sunk. In addition, the federal government had temporarily lowered the value added tax. The inflation rate 2020 fell to 0.5 percent.

The Federal Statistical Office recently determined an inflation rate of over 3 percent 1993. At that time, prices rose by 4.5 percent. Since then, the average annual price increase has always been below 3 percent. But the price increase of 2 to 2.5 percent expected for 2022 is also out of line, at least when measured against the rates of previous years. The last time there was an inflation of 2 percent 2012.

The expectations of the past year have not come true: In the summer 2020 numerous Economists and experts not only in Germany predict that there will be no significant increase in inflation.

According to the Ifo, it is uncertain whether other factors could drive prices up even more than is now forecast. Accordingly, the pent-up demand of consumers after the Corona crisis could be stronger than previously assumed. The rising prices for raw materials and intermediate products could also have an impact on goods and ultimately consumer prices in the event of persistent material bottlenecks. Super E 10 reached the highest price in around seven years last Sunday, as the ADAC announced when asked. On a nationwide daily average, this type of fuel cost 1. 569 euros per liter. By Tuesday, this value fell slightly by 0.3 cents. Diesel cost an average of EUR 1. 398 on Tuesday, which is just below the previous year’s high.

This puts E 10 currently good 31 Cent above the annual average 2020, diesel is almost 29 Cent more expensive. The main driver is the rise in oil prices.

Federal Economics Minister Peter Altmaier (CDU) expressed concern. You have to look where it is possible to cushion “excessive developments” in individual areas, said Altmaier in Berlin. Bavaria’s Prime Minister Markus Söder (CSU) had previously called for an “inflation brake” in the “Handelsblatt” – what this should look like is unclear.

Altmaier sees the German economy in general in robust shape. He reiterated the forecast of the federal government, which expects economic growth of 3.5 percent this year and 3.6 percent next year. “We are overcoming the economic consequences more and more,” said Altmaier.

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