Cheap public transport can reduce inflation in Germany
2022.12.09 05:16
Cheap public transport can reduce inflation in Germany
Budrigannews.com – Experts said on Friday that a low-cost public transportation ticket agreed to by political leaders could slow German inflation in the coming months. One expert cited the power of government measures to quickly ease price pressures.
Carsten Brzeski, chief economist at ING, said that the 49-euro ($51.73) monthly ticket would act as a new inflation brake. It was inspired by an even cheaper but temporary plan from the government’s first relief package for the energy crisis.
He anticipates that the so-called Deutschlandticket and a cap on gas prices that will begin to apply to households and businesses in the first quarter of 2023 will result in an inflation rate that is one percentage point lower than usual in the first quarter of 2023.
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Brzeski stated that the 49-euro ticket was “further proof that it is currently governments, not the ECB, that can push inflation down quickly.” “So with this we will also reach peak inflation in December,” he said.
In Europe’s largest economy, inflation reached 11.6% in October, its highest level in decades, before falling to 11.3% in November.
ETR: Commerzbank Joerg Kraemer, chief economist, stated that he anticipates that the Deutschlandticket, which is valid for all national regional trains and public transportation, will reduce inflation by 0.3 percentage points.
However, he cautioned that there was extraordinary vulnerability and that the alleviation measure was probably not going to change the fundamental pattern, with out of this world energy costs expected to overwhelm going into the new year.
Following negotiations with the country’s 16 state leaders, Chancellor Olaf Scholz announced late on Thursday that the Deutschlandticket would be introduced in the first quarter of 2023, though he did not specify a specific date.
