Finance Minister Olaf Scholz said that Germany is monitoring a recent rise in inflation closely. But the government shares the assessment of central banks that the jump in consumer prices is largely driven by temporary factors.
When asked if the jump in inflation and the European Central Bank’s ultra-loose monetary policy could become a problem for Germany, he said that they are always looking closely at this. But so far, there is much to suggest that the assessment of the central banks is correct. Scholz also added that they can now also hope for a decent upswing in the economy, where they are gradually leaving the pandemic behind them. It will also be possible for them to do even better than they are currently forecasting.
Economy Minister Peter Altmaier said that the German economy which is the Europe’s largest, should grow by between 3.4% and 3.7% in this year. This is by offering a more upbeat outlook than when the government raised its forecast at the end of April. The recovery brings concerns about inflation along with it. In May, Germany’s annual consumer price inflation has been accelerated. The Federal Statistics Office said that this advances further above the ECB’s target of close to but below 2%.
Albert Fueracker, the Bavaria’s finance minister, told daily Bild in comments that higher inflation is compounding the plight of savers. And also, he added that the European Central Bank should respond by raising its interest rates from 0%. He is also a member of Bavaria’s conservative Christian Social Union (CSU). And with this he told a mass-selling daily newspaper that Germany is a country of savers and the ECB’s longstanding zero interest rate policy is poison for typical savings plans.
Fueracker even said that in combination with the now rising inflation, the expropriation for savers is becoming more and more noticeable. Bavaria has been warning for years that the zero-interest rate policy must be ended and now it is high time. The ECB’s 0% interest rates hurt savers as they are left with little if any gain. This has been the long complaint of the conservative Germans. And therefore, this is also a problem compounded by rising inflation eroding the value of their nest eggs. A national measure of inflation rose to 2.5%, in this May. This is the highest level since 2011.
