The Acceleration of Inflation in 1992

The acceleration of inflation in the OECD area since mid-1988 has prompted monetary policy in a number of countries to adopt a more restrictive stance. Over the last two years upward pressure on prices abated under the impact of falling raw material prices and decelerating wage increases. However, the upward drift of wages and prices gained momentum in Western Germany and Austria until 1991, partly due to special factors stimulating business activity. The raise in indirect taxes also contributed towards higher inflation. In both countries which for many years had exhibited a high degree of price stability the rate of inflation almost attained the OECD average in 1992.