Germany to see inflation relief at start of 2022 – economy ministry

Germany’s inflation rate will decrease significantly at the start of next year after the effects of one-off factors run out, Germany’s economy ministry said on Monday.

The effects of a temporary reduction in value-added tax rates in mid-2021 helped lead to an inflation rate of 4.5% in October, compounded by a sharp rise in prices for raw materials and a rise in energy prices as part of the climate package.

The supply bottleneck has become more entrenched, the ministry said, meaning industrial activity is likely to remain subdued in the coming year despite a backlog of orders.

Germany’s economic output is likely to increase only slightly in the final quarter of the year, it said.
Source: Reuters (Reporting by Miranda Murray)