📝 Europe Inflation Forecast Revised Up To 7.5% In 2022, 3.6% In 2023: Rabobank

We have revised our inflation forecasts to include the effects of a ban on Russian oil and further food price pressures. We now forecast 7.5% inflation for 2022 and 3.6% next year. While we expect inflation to peak in the second half of the year, the descend will be slower than historically. Inflation is driven by supply factors, which should limit the price effects of demand destruction. This also means that upside risks remain, as we detail below. Our scenario analysis of an oil boycott sees prices potentially spiking to $170 per barrel. Besides energy, food price inflation is also likely to remain more elevated due to high fertilizer prices, disruptions in the production and distribution of food commodities, etc. We see food and beverages inflation spiking above 10%y/y by end-2022 (up from 6.3% in April)