Germany: The Minister of Finance expects inflation to reach 7% in 2023
The German Finance Minister Christian Lindner expected inflation in Germany, the largest economy in Europe, to drop this year to 7%, and to continue to decline in 2024 and beyond, expressing his belief that high energy prices will become the new reality.
Lindner said in a press interview with the Bild newspaper, published on Sunday, that “the target level for inflation will remain at 2%… This should be the highest priority of the European Central Bank and the German government”.
Inflation in Germany had recently increased on an annual basis, due to the rise in energy prices, following the Russian military operation in Ukraine, and the contraction of Russian energy exports, and it declined slightly in November to 11.3% from 11.6% from the previous October.
Middle- and lower-income families in Germany are struggling to cope with inflation and soaring energy prices, amid accusations of government inaction.
On December 25, the German economic Handelsblatt newspaper reported that German residents are waiting for a significant increase in gas and electricity prices by 112% at the beginning of 2023, despite the measures taken to reduce energy prices.
Wolfgang Kupecky, Vice-President of the German Bundestag, said, “Germany risks becoming a bankrupt and dysfunctional country if it fails to address the energy crisis and continues its unbalanced fiscal policies”.
It’s noteworthy that the net losses of the German Uniper energy company rose during a period of 9 months to 40 billion Euros, due to Western sanctions against Russian energy sources, which caused a decline in these supplies.