When will the inflation rate be low
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At first glance it sounds great: prices are no longer rising. The inflation rate in the euro zone is zero percent. Rigobert Kaiser on the advantages and disadvantages of low inflation.
By: Rigobert Kaiser
The biggest disadvantage is obvious: German savers no longer get interest when they bring their money to the banks. The extremely low interest rate policy of the ECB is therefore particularly controversial in Germany, but ECB President Mario Draghi is unwaveringly sticking to it:
"Our job is to ensure stable prices. In the entire Eurozone, not just in Germany. We are following European law and not politics, because we are independent."
The ECB understands stable prices to mean annual inflation of 2 percent. Why 2 percent of all things, explains Bundesbank President Jens Weidmann, who has often argued violently with Mario Draghi:
"One of the main reasons is that a central bank wants to maintain a safe distance from the zero line so that it can react in terms of monetary policy when the economy weakens and price prospects are subdued."
The German economy is doing well
In the southern countries in particular, however, the economy does not want to take off. The German economy, on the other hand, is doing well. As in the public sector, the wage increases are generous. Almost 5 percent over 2 years with zero percent inflation - the employees benefit from that, Verdi boss Frank Bsirske is pleased: "We have set ourselves a clear real wage improvement in this wage round. Measured against the extraordinarily low inflation rate, this is the case Degree guaranteed. "
Another major reason for the low inflation is low energy prices. While a barrel of oil cost over $ 100 two years ago, it slipped below $ 30 this year. It currently trades for $ 45. Drivers notice this when they refuel, house builders when the heating oil dealer comes: "The customer fills up, he fills up even if he doesn't have to fill up. I've had customers who refueled 1000 or 1500 liters because it is so cheap. "
It's smart to take advantage of this unique opportunity. Because there are already signs of a turnaround in energy prices, predicts BayernLB's chief economist, Jürgen Michels:
"With the current movement in oil prices, there is definitely a chance that we can see 1.7 or 1.8 in the euro area in the coming year. In the medium term, I think it will be difficult for the ECB to achieve this 2 percent target."
The inflation rate is just an average calculation. Individual prices can therefore rise sharply. Inflation, or the feeling of inflation, has a lot to do with the individual's living conditions, emphasizes Michels. So when bakers raise prices or rents rise. "I am much more aware of these daily goods, including their price increases, than is the case with all the other components that I just don't buy that often," says Michels.
One example is computers, which have become cheaper and cheaper over the past few years. One thing is currently not threatening the euro zone: hyperinflation, as it has been predicted by experts for years. Deflation, a fall in prices on a broad front is just as great an evil, because then there is a risk of slump in sales, wage cuts and mass layoffs.
Business journalist in the economy and social department, subject areas: stock market, financial and corporate reporting
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