The Bundesbank sees inflation at 10% in the fall and warns of the growing risk of recession

MADRID, 22 Ago. (EUROPA PRESS) -

The Bundesbank, Germany's central bank, has warned of significantly rising risks pointing to a contraction in GDP during the second half of the year, when inflationary pressures may build to push the CPI to around 10% this fall.

According to the monthly bulletin of the Bundesbank, the institution's experts consider that the economic development of Germany will be negatively affected by the unfavorable evolution of the gas market this summer and the coming months.

"Therefore, the probability that the GDP will decrease in the winter semester has increased significantly," warns the entity. In this sense, after the stagnation recorded between the months of April and June, the German central bank sees it as likely that the paralysis of GDP growth will extend into the third quarter.

"However, the high price increases are further reducing the purchasing power of households. In addition, concerns about an impending winter gas shortage weigh on the mood to buy," he says, recalling that the most recent reading of the consumer confidence index of the GfK institute has fallen again and confirms that the economic and income expectations of households have clouded significantly.

On the other hand, the Bundesbank technicians warn that the inflation rate will reach "new highs in the fall" as a result of the end of the relief measures introduced in September, which will probably cause inflation to rebound notably, while from October it will be applied also a surcharge on gas rates and, at the same time, the VAT rate on this fuel will be reduced.

"Overall, the inflation rate could reach the order of 10% in the autumn," Bundesbank experts predict, stressing that the inflation outlook remains extremely uncertain, mainly due to the unclear situation on the commodity markets, although the central bank estimates that price risks continue to point to the upside.