Ifo said inflation in Germany could hit as high as 3% this year. That could be explained by “accelerated increase in prices over the course of 2021” in apparent in energy, food, and some service industries.
Inflation is expected to slow to 2.0-2.5% next year. But Head of Forecasts Timo Wollmershäuser said: “At the beginning of 2022, the special factors that have been driving inflation will peter out: it will be a year since the reduction in VAT was reversed and energy prices reached their pre-crisis levels,”
Separately, ECB Governing Council member Pablo Hernandez de Cos said, “ECB is monitoring the inflation performance closely but we are not seeing any second-round impacts.”
