We should not forget about cost inflation

There is often concern that demand will be sluggish in the aftermath of the coronavirus crisis, in a situation of high uncertainty where households and companies will want to deleverage. If there was only weak demand for goods and services, the outlook would be for continued low inflation. But we should not forget that there will also be inflation through production costs after the crisis: the new health standards, which are likely to be permanent (social distancing, employee protection equipment, etc.) will greatly increase companies' unit production costs, and in order to remain profitable, companies will have to pass these costs on to the purchasers of goods and services. This will probably result in inflation, which could be quite high.