*Inflation stood at 5% in December and at 2.6% on average over the year 2021. The core inflation rate is at 2.6% over one year and at 1.5% on average.*

*A very conservative projection based on the average monthly increases seen from 2015 to 2019 would imply an inflation rate of 3% on average for 2022 and 1.8% for the underlying inflation rate. The ECB is at 3.2% and 1.9%. This suggests that the Frankfurt institution expects price increases to normalize in the coming months. Inflation will be temporary.*

*Inflation stood at 5% in December and at 2.6% on average over the year 2021. The core inflation rate is at 2.6% over one year and at 1.5% on average.*

*A very conservative projection based on the average monthly increases seen from 2015 to 2019 would imply an inflation rate of 3% on average for 2022 and 1.8% for the underlying inflation rate. The ECB is at 3.2% and 1.9%. This suggests that the Frankfurt institution expects price increases to normalize in the coming months. Inflation will be temporary.*

The analysis of contributions still shows a very **significant weight of energy** (half of inflation), a **moderation in the price of services** while the **prices of goods and those of agriculture continue to increase. The contribution of food prices is expected to increase as international prices recently surged.**

**The inflation carryover is high at the end of 2021 for 2022**. By comparing the index for December with the average index for 2021, the advance is **2.4%**. If the price index is stable over the whole of 2022 at the level of December 2021, then the average inflation rate for 2022 will be 2.4% (but 0% from December to December).

F**or the core inflation, the carry over would be 1.4%**** f**or 2022 at the end of 2021.

To fix ideas on the figures for 2022, we can refer to the two middle graphs; one relating to the price of non-energy goods and the other to the price of non-energy services. There is a certain regularity month after month from 2015 to 2019.

I took the average monthly changes from 2015 to 2019 to see what inflation would be in 2022 if the situation converged to a normalized situation.

The inflation rate starts with a gain of 2.4% (carry over).** If we take for each month the average variation of the month from 2015 to 2019 then the average inflation rate for 2022 comes out at 3% and the inflation rate would be at 1.1% from December 2022 compared to December 2021.**

The same calculation for the underlying inflation rate, which eliminates the price of energy and that of food, the two volatile components of the price index. In this case, the carry over is 1.4% and **the average underlying inflation rate for 2022 would be 1.8%. From December 2021 to December 2022, **the underlying price index would increase by 1%. The price development will be a little higher because the sources of inflation for 2021 have not yet dissipated. This is what the two graphs on the prices of goods and services show.

**In the ECB’s projections from last December, the average inflation rate would be 3.2% in 2022 and the average underlying inflation rate would be 1.9%. **Figures not far from the simple simulation that I presented. **This suggests that the ECB expects the inflation rate to normalize sometime in 2022.**