2023-05-18 13:23:13
Sie did it again. Christine Lagarde, President of the European Central Bank (ECB), stressed for the second time when raising interest rates in May that some companies had contributed to inflation by widening their profit margins. And every time the ECB President talks about profits, the argument gets a little louder. Then there is talk of “greed inflation”, of greedy companies whose prices should be limited or whose profits should at least be taxed away. Now, however, the ECB President is only talking about a few companies – that can mean everything or nothing. So how is the situation really?
In any case, corporate profits are not primarily responsible for the great inflation of the past year. Nobody seriously claims that. The prices of the imports that came into the euro zone alone had risen by 12 percent – and company profits are nowhere near as good as that. Earnings inflation has remained below general inflation. But these are all figures for the past year. Inflation isn’t what it used to be.
#Prices #companies #profits