Europe

Inflation will continue to fall, but high energy prices will become the new normal

German Finance Minister Christian Lindner expects inflation in Europe’s largest economy to fall to seven percent this year and continue to fall in 2024 and beyond, but he believes high energy prices will become the new normal, reports Reuters.

“The goal remains two percent. This must be a top priority for the European Central Bank and the German government,” said Lindner in an interview with German Bild.

The agency reports that “prompted by the jump in energy prices after the Russian invasion of Ukraine and the drop in Russian exports of energy products”, German year-on-year inflation slowed slightly to 11.3 percent in November from a high of 11.6 percent the previous month.

According to a report by the Federation of German Industry (BDI), inflation is likely to remain high throughout the year, and the two percent target rate set by the European Central Bank may not be reached until 2025 either.

Lindner said Germany needed an “impartial” energy policy to keep the industry alive, adding that domestic gas and oil fracking and nuclear power should be considered alongside renewables.

Source: euronews

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