The Deutsche Bundesbank (Buba) stated on Monday that the inflation rate "should still average around 7% for the current year" but that the price outlook is "particularly uncertain" at the moment, APA reports citing Teletrader.
Inflation is expected to "rise slightly at first and then fall only moderately," while government measures targeting the prices of fuel, electricity and local public transport "will temporarily dampen the price increase."
The Bundesbank added it forecasts "at most a slight increase in economic output for the current spring" due to high inflation, supply bottlenecks, the high level of uncertainty and weaker foreign demand. Companies are reporting a significant drop in outlook compared to the previous quarter, particularly in the construction and manufacturing sectors. Meanwhile, unemployment fell to pre-pandemic levels for the first time, reaching 5% in April, with 2.29 million unemployed people.