What is the main topic?

The article discusses the forecast for German inflation to remain above 2% through mid-2022, according to Bundesbank.

Why is German inflation rising?

Inflation is rising due to tax hikes, supply bottlenecks, and increased commodity prices.

What is the ECB's stance on inflation?

The ECB expects inflation to remain below its 2% target in the long term, despite temporary increases.

Editorial & Advertiser disclosure

Global Banking & Finance Review® is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Banking

German Inflation Could Stay Above 2% Through mid-2022 -Bundesbank

Published by maria gbaf

Posted on September 28, 2021

3 min read

Last updated: February 1, 2026

Add as preferred source on Google

Graph depicting rising inflation rates in Germany, relevant to banking and finance news - Global Banking & Finance Review — This image illustrates the increasing inflation trends in Germany as reported by the Bundesbank, highlighting the implications for banking and monetary policy in the euro zone.

German Inflation to Stay Above 2% Until Mid-2022: Bundesbank

FRANKFURT (Reuters) – German inflation is likely to accelerate from already high levels and will stay above 2% through mid-2022, exceeding the European Central Bank‘s target for the 19-nation euro zone, the Bundesbank said in a monthly report on Monday.

Inflation has surged this year on a plethora of one-off factors from tax hikes to supply bottlenecks and commodity price rises, fuelling a debate about the need for exceptionally easy monetary policy, particularly among inflation-wary Germans who already harbour some mistrust of ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB policy.

“Inflation rates between 4% and 5% are possible on a temporary basis between September and the end of the year,” the Bundesbank said. “Inflation is then likely to decrease noticeably at the start of 2022 but it will still be above 2% by the middle of the year.”

While most economists agree that the high readings of the past several months are temporary, there is a debate about how much of these one-off price pressures may translate into permanent inflation through so-called second round effects.

Even ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB President Christine Lagarde argues that “many” of the causes of high inflation are temporary, indicating that she also expects some of these factors to linger beyond the pandemic.

The ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB nevertheless expects price growth to remain weak and linger below its 2% target for years to come.

Conservative policymakers meanwhile argue that the gap between expected inflation and the ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB’s 2% target is rather narrow, so only a few of these second round effects would need to materialize to shift inflation higher.

Conservatives are still in a minority on the ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB’s Governing Council, however, so ultra-easy policy is likely to continue for years to come.

But the ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB is expected to end a crisis-era stimulus scheme next March and the key debate over the coming months will be whether to replace this lost support with other measures.

(Reporting by Balazs Koranyi; Editing by Catherine Evans)

German Inflation Could Stay Above 2% Through mid-2022 -Bundesbank

Quick Summary

German Inflation to Stay Above 2% Until Mid-2022: Bundesbank

Key Takeaways

Frequently Asked Questions about German inflation could stay above 2% through mid-2022 -Bundesbank