At its monthly forecast meeting, Commerzbank once again raised its inflation forecast.

At the same time, German banks believe that economic risks have increased due to monetary tightening, and they now expect a recession in the United States. In addition, there is a danger that Putin will permanently and completely shut off the gas valve on all economic projections, like the sword of Damocles.

For the euro zone and the US, Commerzbank does not expect inflation to peak before the fall, with inflation rates above 9 percent in the US and 8.5 percent in the euro zone. They have raised their inflation forecast for the eurozone for the coming year sharply, to 4 percent from 2.5 percent. For the US, they have raised their inflation forecast for 2023 to 5.0 percent from 4.5 percent.

This is mainly due to the fact that gas and electricity prices are expected to remain high for longer than previously thought, Commerzbank continued. In addition, they see rising food prices as a result of rising costs of, among other things, energy and fertilizers.

Commerzbank has also significantly lowered its growth forecast for Germany, to 1.0 percent from 2.5 percent in 2023. They point out that the United States is still the world’s largest economy and an important trading partner for Germany, and in that sense a recession is also a danger signal for Germany and the euro area. Commerzbank reduced its growth forecast for the euro zone to 0.8 percent from 2.1 percent previously.

Yesterday’s new figure showed that the overall PMI index for the euro zone had fallen to 51.9 in June after 54.8 in May, which Handelsbanken Capital Markets said was clearly weaker than the 54.0 forecast and indicated a significant slowdown in growth early in the quarter. third. .

“But hopelessly, the same figures show that inflationary pressures remain strong; indicators for buy and sell prices continue to approach record highs », the broker wrote.