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Inflation to stay high for two years – head of Germany’s economic advisers

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BERLIN — Inflation is likely to remain high for another two years as companies pass on higher input costs and in some cases exaggerate them, the head of the council of economists that advises the German government was quoted on Saturday as saying.

“Inflation will also be an issue in 2024, and only thereafter will we maybe see it returning to 2%,” Monika Schnitzer, the head of the so-called “wise men,” was quoted as saying by the Rheinische Post newspaper.

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“Inflation is remaining high because we are seeing second round effects, with companies passing on their higher costs – and some significantly exaggerating.”

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She said she was not concerned about a wage-price-spiral given measured wage rises in the chemistry and metal industries.

She was concerned however about high electricity prices, saying the government should urgently check whether it would make sense to let the remaining three nuclear plants run for two or three years longer than planned.

“It would make sense to quickly order new fuel rods now, that would give us more security next winter,” she said.

Europe’s biggest economy had planned to phase out nuclear power by the end of this year but the government decided in October to extend the lifespans of the remaining three plants until April given the current energy crisis. Some members of government would like to see their lifespan extended further. (Reporting by Bettina Cosima Larrarte; writing by Sarah Marsh; editing by Philippa Fletcher)

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