Emerging markets in general, and China in particular, which is forecast by the IMF to grow by 9,6 per cent this year, have been growing strongly, and there are now fears of evolving asset price bubbles in China.
The output gap is closing, in other words, Germany’s economy is exploiting its potential virtually to the full. Surprisingly, prices are still rising slowly. But this will change over the short or long term. And it will help to trigger a change in monetary policy. So there is light at the end of the tunnel.