Inflation – why did it rise and what are the drivers ahead?

Economic Memo - February 2023 - No. 3

Authors Spange, Morten; Harr, Thomas
Subject Inflation, wages and prices; Monetary policy; Public finances and fiscal policy; Economic activity and employment
Type Economic Memo
Year 2023
Published 9 February 2023
Abstract icon The surge in inflation in 2021-22 reflects the covid-19 pandemic and Rus-sia’s war in Ukraine as well as the associated policy responses. In 2023-24, at least three factors are likely to drive inflation: (a) more stable energy prices, (b) an expected slowdown in aggregate demand growth caused in part by tighter monetary policy, and (c) improving supply chains.