The entrance to the Germany in a new one recession it is “increasingly probable”. At the same time, German inflation it will continue to accelerate and could peak at 10% in the fall. That's what she writes Bundesbank in its latest monthly bulletin.
“Il decline in economic output in the winter months it has become much more probable – reads the document from the German Central Bank – The high degree of uncertainty on gas supplies this winter and the sharp increase in prices could weigh significantly on households and companies”.
The trend of prices in Germany
I high prices and the shortage of gas, explains the Bundesbank, are already forcing Germany to reduce consumption and the energy-intensive sectors, from the production of metals to that of fertilizers, are suffering the most.
Meanwhile, continues the German central institute, i energy costs will continue to push inflation up and is unlikely to peak before the autumn, when the level of price growth could be five times higher than the ECB's 2% target, thereby breaking through the barrier double digit.
The risk of the price-wage spiral
"All in all, the rate of inflation could reach 10% in autumn – notes the Bundesbank – The upside risk for inflation is high, especially in the event of a complete interruption of gas supplies from Russia”. This increases the risk of rapid wage adjustments, especially given the historically low level of unemployment. The risk is therefore that one is triggered price-wage spiral.
