The president of the Bundesbank, Joachim Nagel, estimates that in 2022 several interest rate increases will be approved to combat the rise in prices, the weekly Der Spiegel reported this Friday, quoted by Efe.
“At our meeting in June, we have to give a clear signal of the direction we are going to take. In my opinion, then, in July we have to take a first step” in this direction and “more will follow in the second half of the year“, the governor of the German central bank told the publication.
According to Nagel, a reduction in inflation is not yet expected, which both in Germany and in the European Union as a whole reached 7.4%.
“Inflation won’t come down overnight, it may take some time. It is important that long-term inflation expectations are well anchored,” he said.
Even so, Nagel is optimistic about the evolution of the German economy and assures that “it is not so bad: before the war we had a growth of more than 4% by 2022. Now it can be cut in half,” she said, adding that “with growth around 2%, it’s not all bad.”
The President of the Bundesbank doesn’t think a ‘stagflation’ scenario is likely (high inflation and economic stagnation), considering that “the situation remains solid”.
Nagel also does not believe in the danger that, in some countries of the European Union (EU), the situation will deteriorate due to high levels of indebtedness and the increase in interest rates, as in Italy, indicating that “it is true that the Italy’s debt level increased again during the pandemic.
“But the risk outlook for public debt is not very high,” Nagel said, arguing that the European Central Bank (ECB) should not intervene to help some countries.
Source: Observadora
