Bank president Christian Sewing does not expect inflation to return to the low levels it had before the corona pandemic. “With the inflation trend we are currently experiencing a change of floor, from inflation rates below two percent in the past decade to rates of probably 2.5 to 3 percent in the next few years,” said Sewing of the Funke media group.
Germany has to do with several factors that would drive prices up in the long term, said the President of the Association of German Banks. Sewing mentioned the demographically induced shortage of skilled workers, the restructuring of the economy towards sustainability and the readjustment of global supply chains. “In addition, more mobile working could drive salaries up in some places because medium-sized companies in the German provinces suddenly have to compete with jobs at large companies in the metropolises,” added Sewing.
Sewing, who is also CEO of Deutsche Bank, expects economic growth of around four percent for the coming year. “Even if the start will be difficult, the economic burdens from the pandemic should ease again in the spring.” The current delivery bottlenecks should also ease over the course of the year. “The high order backlog in the industry will then provide the basis for a very dynamic recovery in the summer and autumn of next year.”