ZEW Economist Friedrich Heinemann on the Inflation Figure in December 2022


Return to Price Stability Not Yet Possible This Year

The Federal Statistical Office published its preliminary results on the development of the German inflation rate in December 2022. According to the calculations, the inflation rate measured by the German consumer price index fell from 10.0 per cent in November to 8.6 per cent in December. Professor Friedrich Heinemann, head of the Research Unit “Corporate Taxation and Public Finance” at ZEW Mannheim, has commented on this matter:

“The decline in inflation at the end of the year is primarily driven by three factors. The gas price cap has relieved private households of their gas payments in December. The lower oil price reduces the price of fuel and heating oil. In addition, the euro rising in value has made imports into the eurozone less expensive. The ECB is partly responsible for this first small success in the fight against inflation. By raising interest rates, the ECB has helped the euro to recover against the dollar. Nevertheless, a return to price stability is not yet possible this year. In Germany, inflation is no longer limited to energy prices, but now affects almost all goods and services. And measures like the gas price cap ultimately only treat the symptoms.”

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