IMF: A sustained rise in German wage & price inflation is needed to help lift eurozone inflation
|An International Monetary Fund official crossed the wires in the last hour, via Reuters, suggesting that a sustained rise in German wage and price inflation is needed to help lift eurozone inflation and facilitate normalization of monetary policy.
Key quotes (via Reuters):
- Germany should use available fiscal space for initiatives to enhance growth potential
- Such initiatives include investment in physical and digital infrastructure
- IFM recommends Germany make pension reforms to make it attractive to work longer
- German banking and life insurance sectors must accelerate restructuring to shore up profitability and resilience
- German growth potential 1.25 percent/yr in mid-term, slightly higher in short term
- IMF official sees German current account surplus falling to 7.5 percent in 2022 from 8.3 percent last year
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