German minister warns of stagflation risk

Christian Lindner also defended sending heavy weapons to Ukraine in order to win the war.

German Finance Minister Christian Lindner said on Saturday (April 23, 2022) that there is a risk of stagflation in the country because of the economic dangers faced after the invasion of Ukraine.

For him, the chances of inflation rising rapidly and economic growth falling are real. “There is a danger of impoverishment for many people”.

Confidence in Germany’s recovery has been shrinking. Investors fear that rising prices triggered by the conflict in Europe will reduce production.

The German economy is expected to shrink by nearly 2% in 2022 if the war escalates and the embargo on Russian coal, oil and gas leads to restrictions on energy providers and industry. The estimate is from the Bundesbank, Central Bank of Germany.

Lindner opposed the tax hike and highlighted the need for economic aid to key industries and households hardest hit by the price rise.

For the minister, Germany must “do everything” to help Ukraine win. “But the limit of ethical responsibility is to jeopardize our own security and NATO’s homeland defense capability”added.

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