Brocker.Org: IMF: A sustained rise in German wage & price inflation is needed to help lift eurozone inflation

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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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