The economists of leading financial institutions in Germany do not currently see the increased risk of a prolonged or even out of control price spiral. “Inflation has gone into high gear in 2021, but it will probably run out of air again by 2022,” said Katharina Utermöhl, an economist at the Allianz Group, in a survey by the German Press 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 hover around the target of almost two set by the European Central Bank in the next few years Percent will level off.

Veronika Grimm also assumes that the economy will normalize, although the price-driving effects such as the shortage of microchips or the high raw material prices will not disappear as quickly as hoped.

"As long as wage settlements remain moderate, there is not much to suggest that we are 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 inflation rates should not be taken up 1: 1 in the collective bargaining."

Special items in August

In August, the inflation rate in Germany was 3.9 percent and was therefore significantly higher.

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 reduced VAT alone ensured a lower price increase.

In order to get into a galloping price surge, there must be further effects, 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 grow by a good three percent for the current year. "We expect even stronger growth of 4.3 percent next year," 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 next Thursday (September 30th). In August around 2.58 million people nationwide were out of work. The unemployment rate was 5.6 percent.

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

"In 2022, the strong recovery on the labor market will probably be fully reflected in the figures: According to our forecast, we will again 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.

Employees and the catering and hotel industry are missing

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.

"Immigration almost completely failed to materialize during the corona crisis," she said, referring to the international exchange that practically came to a standstill during the corona pandemic.

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 Nuremberg professor does not believe that there will be a complete recovery from the consequences of the corona pandemic quickly.

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

Keywords: