The German Bundesbank today (June 10) lowered its forecasts for German economic growth and expects inflation to rise significantly. Rising food and fuel prices are affecting household purchasing power and confidence.
The Bundesbank expects inflation to rise by 7.1% in 2022, higher than the December forecast of 3.6% and raises the inflation rate for 2023 from 2.2% to 4.5%.
Bundesbank chairman Joachim Nagel said: “Inflation this year will be stronger than it was in the early 80s.”
Meanwhile, the Bundesbank expects the German economy to grow by 1.9% this year, less than half the December forecast of 4.2%, and lowered its 2023 growth forecast from 3.2% to 2.4%.
The German Bundesbank has also lowered its economic forecasts and expects the German economy to grow by 1.6% this year.