Eurozone: Durable goods will turn deflationary only in 2023

Up until recently there had been growing signs that the forces that lifted durable goods prices last year had begun weakening or even reversing. But Russia’s invasion of Ukraine is likely to sustain upward pressure on prices for most of this year.

Consequently, our expectation that durable goods will become a drag on inflation is not likely to take place until 2023.

What you will learn:

• An easing of the dearth in chips and the slowing of the global inventory cycle has finally begun reducing the impact of supply blockages.
• The largest impact of the invasion comes via higher commodity prices with our global energy and metal price forecasts for this year now 16% and 8% higher, respectively.
• Demand-side pressures could abate faster than expected, though.