In an interview with Die Zeit, German ECB Governing Council member Joachim Nagel reinforced ECB’s current rate path as necessary, citing persistent inflationary pressures, particularly within the services sector due to rising wages.
Nagel emphasized, “We are not exaggerating. There is still noticeable price pressure” .
Nagel also voiced concern over economic fallout from US President-elect Donald Trump’s proposed tariffs, estimating they could trim as much as 1% from Germany’s economic output if enacted.
“If the new tariffs actually materialize, we could even slip into negative territory,” he warned, a worrisome prospect as Germany already faces weak growth projections.
The German economy is anticipated to stagnate through 2024, with growth in 2025 expected to remain below 1%.
