Bundesbank head warns of recession risks in Germany due to US trade policy

Joachim Nagel, the head of the Bundesbank, expressed concern about a possible recession in Germany while analyzing the current economic situation. He believes that the US protectionist measures are negatively impacting the already stagnating European economy.

Nagel emphasized the need for a mutually acceptable solution regarding trade tariffs, stressing that a lack of compromise could further deteriorate the economic conditions. He added that establishing a dialogue between the parties is key to stabilizing the situation in Germany and Europe. 

However, domestic measures could be of some help to the economy, too. Nagel said that additional financing of key economic sectors would stimulate growth. At the same time, he dismissed concerns about the impact of large-scale injections on accelerating inflation.

The Bundesbank president remained cautious in his forecasts, but positively assessed the prospects of economic recovery in the country within several years. Meanwhile, the ECB will continue to monitor the situation and adjust interest rates at each meeting to achieve the 2% target level of price growth.