Germany’s harmonized inflation is likely to remain exceptionally high at the start of this year, Bundesbank said Monday.
In its monthly report, the bank said the special impact of the introduction of the climate package, the recovery in crude oil prices and the reversal of the temporary reduction in VAT rates drove inflation higher last year.
Further, non-energy services and industrial goods rose sharply at times over the course of the year, mainly due to the supply bottlenecks and price increases to compensate for previously suffered profit losses.
“Since these factors are also having an effect into the new year, the rate at the beginning of 2022 is likely to remain extraordinarily high, although the above-mentioned special effects will not apply,” the bank said.
“In addition, due to the significant rise in market quotations for natural gas, the corresponding end customer tariffs will be raised significantly.”
In 2021, annual average inflation jumped to 3.2 percent from 0.4 percent in the previous year.
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