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2021/12/17 / Erste Group Research

EZ - Inflation forecast for 2022 raised

European electricity and gas prices reached new highs in recent trading days. As a result, prices for electricity and gas have now increased fivefold in the course of 2021. The latest price rise has been fueled by problems at a French nuclear reactor, causing an additional loss of much-needed capacity.

With the futures markets now also expecting a significant rise in electricity prices in Europe on average for the year in 2022, we have raised our inflation forecast for 2022 to 2.9%. The expectation of faster wage growth than previously also played a key role in raising our forecast. From today's perspective, the market does not expect a sustained easing of the situation on the energy markets until 2023.

Apart from local problems in the European power grid, from a regional perspective, a substantial increase in gas demand from Asia and in particular from China threw the global energy markets out of balance in 2021. Due to the increasing geopolitical importance of natural gas to rapidly drive the energy transition, the European electricity market will continue to be highly dependent on developments in global natural gas markets in the coming years.

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General information

AuthorErste Group Research
Date2021/12/17
Languageen
Product nameWeek ahead
Topic in focusMacro/ Fixed income
Economy in focusEurozone, United States
Currency in focusEuro, US Dollar
Sector in focus-
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