Clifford Beaumont says Germany will seek ways to counter the impact of anticipated interest rate hikes on its budget.
TAIPEI CITY, TAIWAN, April 10, 2018 /24-7PressRelease/ — Clifford Beaumont analysts say Germany’s finance ministry anticipates an increase in interest rates over the next few years. Newly appointed finance minister, Olaf Scholz, has begun to make moves to buffer against extra expenses in a bid to meet budget targets.
Clifford Beaumont analysts say rates of between 3 and 4 percent are considered normal but that rates are now below zero percent.
The European Central Bank’s deposit facility currently stands at -0.40 percent while its benchmark refinancing rate is at an all-time low of 0.0 percent.
Clifford Beaumont analysts stated that an average increase of one percent in interest rates for the German economy would translate to an extra 10 billion euros in expenses which could compromise the new government’s attempts to balance its budget.
Money markets are taking the European Central Bank’s first interest rate hike since 2011 into account whilst also weighing how and when to end its bond purchasing program. Clifford Beaumont analysts say this program was aimed at boosting growth and warding off deflation.
While the threat of a trade war with the United States could negatively affect German economic outlook, Germany’s minister of economy said he was confident that the European Union would be able to reach a satisfactory compromise in trade discussions with the Americans.
Last month U.S. President Donald Trump decided to temporarily exempt the European Union which is the US’ largest trading partner along with six other countries from harsh import tariffs on steel and aluminum.
For the original version of this press release, please visit 24-7PressRelease.com here