INFLATION in Germany has probably peaked given the decline in global energy prices, government economic adviser Monika Schnitzer said today, adding that she expects a further drop in gas prices this year. “If something unforeseen does not happen, the peak (of inflation) is actually behind us,” Schnitzer told Reuters.

German inflation measured by the harmonised index of consumer prices (HICP) slowed in December, for the second month in a row, falling to 9.6 percent, thanks to lower energy prices and one-off government aid to households for energy consumption bills.

“We do not see a need to raise interest rates”

Schnitzer also points out that she does not see a need to raise interest rates in the eurozone by more than half a percentage point at the next meeting of the European Central Bank (ECB) at the beginning of February. The ECB is faced with the difficult task of maintaining balance and its moves must be carefully measured, the government economic adviser emphasized.

In the circumstances of a mild winter, as she noted, the economic outlook has improved somewhat. She also added that economic experts were “quite right” when they predicted in November that the German economy grew by 1.7 percent in 2022.

In her opinion, growth may have been even slightly stronger. Germany’s statistical office Destatis will publish the 2022 GDP figure on Friday. Analysts in a Reuters survey forecast that Europe’s largest economy grew by 1.8 percent.

Source: index.hr