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MNI BRIEF: GCEE Raises Inflation Outlook, Cuts Growth Forecast

(MNI) London

Inflation will rise to 6.1% (up from 3.1%) in Germany this year before falling to 3.4% in 2023, the German Council of Economic Experts announced Thursday, with euro area inflation at 6.2%, in large part due to the global uncertainty caused by Russia’s invasion of Ukraine

Germany’s economy is expected to grow by 1.8% in 2022 - down from the 4.6% forecast last year - rising to 3.6% in 2023, while euro area GDP is expected to grow by 2.9% in both 2022 (down from last year’s 4.23% projection 4.23%) and 2023.

The GCEE expects private sector wages to grow by 2.5 % this year and by 4.4 % next year, increasing the risk of a wage-price spiral. The council also called on the German governments to take precautions against a suspension of Russian energy supplies and quickly end its dependence on Russian energy sources.

MNI London Bureau | +44 20 3983 7894 |
MNI London Bureau | +44 20 3983 7894 |

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