An inflation rate of over 3 percent was last seen in 1993. The comparatively high consumer prices this year are largely based on the Corona crisis.
The Ifo Institute expects this year, at 3 percent, the highest increase in consumer prices in almost 30 years. For the coming year, the Munich economists expect an inflation rate between 2 and 2.5 percent, as the institute announced on Wednesday.
That would also be a considerably faster price increase than the average for the past ten years. According to the Ifo Institute, the comparatively high inflation this year is largely due to the Corona crisis: In the past year, energy prices fell due to the crisis. In addition, the federal government had temporarily lowered the value added tax. The inflation rate fell to 0.5 percent in 2020.
The Federal Statistical Office last determined an inflation rate of over 3 percent in 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 the ordinary, at least when measured against the rates of previous years. The last time there was inflation was 2 percent in 2012.
According to the Ifo, it is uncertain whether other factors will drive prices up more than 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.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
