Remarks by the German economy ministry
- No signs of a wage-price spiral that could lead to permanently high inflation
- Sees positive underlying momentum of overall economy persisting
- Sees two-speed economy with services sector benefiting from easing of restrictions, industry sector to be hit by supply bottlenecks
They are not wrong in that regard, in the sense that the underlying factors driving the inflation momentum isn’t quite what is deemed to be sustainable. That said, how long exactly is this supposed ‘transitory’ period going to be?
The global economy is going to take time to recover in a uniform manner and that likely will keep supply chain disruptions in play for an extended period of time.