German finance minister warns of stagflation risk, pledges return to fiscal rigour

German Finance Minister Christian Lindner attends the weekly cabinet meeting at the Federal Chancellery in Berlin, Germany, June 8, 2022. REUTERS/Hannibal Hanschke

BERLIN, June 13 (Reuters) – German Finance Minister Christian Lindner said there was a threat of a time period of significant inflation and very low growth subsequent Russia’s invasion of Ukraine, which experienced driven previously significant inflation up even further even now.

“Stagflation is a doable scenario,” he instructed a conference of loved ones-owned organizations in Berlin on Monday.

He explained the price tag strain could ideal be countered by unwinding the subsidies that had formerly been provided out to prop up the economic climate and that Germany and Europe experienced to return to fiscal discipline.

He extra that Germany’s constitutional financial debt brake, at this time suspended, would arrive back into pressure next 12 months. That would imply a reduction in the stage of new borrowing from this year’s 140 billion euros ($146 billion) to just 10 billion euros.

($1 = .9591 euros)

Reporting by Christian Kraemer composing by Thomas Escritt Enhancing by Christoph Steitz

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