Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

German economy set for post-pandemic bounce in growth and prices, Bundesbank says

06/11/2021 | 04:08am EDT
FILE PHOTO: Closed shop due to the COVID-19 pandemic in Munich

    * Bundesbank raises growth and inflation forecasts
    * Says price surge might affect people's behaviour

 
    FRANKFURT, June 11 (Reuters) - German output is rebounding
from its pandemic-induced slump and inflation could rise faster
than currently expected, potentially affecting behaviour in the
economy, the German central bank said on Friday.
    The Bundesbank raised its growth and inflation forecasts for
this year and the next, assuming that the coronavirus outbreak
would be contained quickly and durably by the vaccination
campaign and that restrictions will soon be relaxed.
    It now expects the German economy to reach pre-pandemic
levels as soon as next quarter, growing by 3.7% this year, 5.2%
next year and 1.7% in 2023. 
    "The German economy is overcoming the pandemic-related
crisis," said Bundesbank President Jens Weidmann.
    The German central bank also raised its forecasts for
inflation for this year and the next, warning there were still
"upside risks".
    It now saw inflation at 2.6% this year, which would be the
highest since 2008 and well above the European Central Bank's
target of price growth "below but close to 2%".
    But the Bundesbank played down the significance of the
surge, blaming it mainly on energy prices and tax effects.
    Without those, inflation would stand at just 1%, in line
with last year and well below 2019's level, the BuBa said. 
    But it still warned that the sudden surge in prices, which
will see inflation touch 4% in late 2021, might affect
perceptions after a long period of low inflation.
    "The exceptionally high inflation rates, by German
standards, projected for the second half of 2021 could
ultimately shift economic agents’ inflation perceptions and
expectations," it said.
    "As a result, wage and price-setting behaviour could change
and exert further inflationary pressure. This would especially
be the case if headline price inflation in the near future were
to be even higher than estimated here."
    German's consumer price index hit a 10-year high of 2.4% in
May.
    But inflation, normally a hot topic in a savings-oriented
country, has not so far become an issue in the election
campaign, with all major parties agreeing with the generally
hawkish Weidmann's view that the jump is likely to be temporary.
    The ECB promised to keep ample stimulus flowing on Thursday
despite the brighter outlook, although three policymakers
dissented with that decision at the meeting.
                     2021        2022        2023
 GDP growth (%)      3.7 (3.0)   5.2 (4.5)   1.7 (1.8)
 HICP inflation (%)  2.6 (1.8)   1.8 (1.3)   1.7 (1.6)
 (December forecasts in brackets)    

 (Reporting By Francesco Canepa in Frankfurt and Michael
Nienaber in Berlin;
Editing by Balazs Koranyi and Kevin Liffey)
  

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / EURO (AUD/EUR) 0.30% 0.63472 Delayed Quote.0.41%
BRITISH POUND / EURO (GBP/EUR) 0.15% 1.17004 Delayed Quote.4.47%
CANADIAN DOLLAR / EURO (CAD/EUR) 0.14% 0.681403 Delayed Quote.5.44%
INDIAN RUPEE / EURO (INR/EUR) 0.25% 0.011292 Delayed Quote.1.04%
US DOLLAR / EURO (USD/EUR) 0.03% 0.837942 Delayed Quote.2.54%
Latest news "Economy & Forex"
01:42pU.S. SEC chair provides more detail on new disclosure rules, Treasury market reform
RE
01:33pWhat is the Treasury yield curve and what is it telling us?
RE
01:30pU.S. retail stock buying hit record level on Friday -Vanda Research
RE
01:22pU.s. itc says tire imports from vietnam sold in the u.s. at less than fair value are negligible and voted to terminate the antidumping duty investigation -statement
RE
01:19pMalta says it has been greylisted by financial crimes watchdog
RE
01:19pMalta prime minister abela says fatf decision is "unjust", pledges to continue with financial reforms
RE
01:18pMalta has been put on a grey list by anti-money laundering watchdog fatf -maltese prime minister abela
RE
01:18pU.s. itc finds imports of tires from vietnam are sold in u.s. at less than fair value and subsidized by vietnamese government -statement
RE
01:15pU.s. international trade commission finds tire imports from korea, taiwan, thailand materially injure u.s. industry -- statement
RE
01:15pGARY KELLY : Southwest CEO Gary Kelly to hand reins to insider Robert Jordan
RE
Latest news "Economy & Forex"