International Development News
Development News Edition

Germany's finance ministry expects rise in the Interest rates

A spokesman for the finance ministry declined to comment on the report.


Germany's finance ministry expects rise in the Interest rates
A possible trade war with the United States is a possible dampener on the outlook. (Image credit: Flickr)

Germany's finance ministry expects interest rates to rise in coming years, causing new Minster Olaf Scholz to take steps to cushion additional costs to meet budget goals, Der Spiegel weekly reported on Saturday.

"The financial planning up to 2022 (envisages) a necessary normalization of the capital market environment," Spiegel cited an internal document as saying.

Experts usually see interest rates of between 3 percent and 4 percent as "normal", compared to below zero percent now, reported Der Spiegel.

The European Central Bank's deposit facility is at -0.40 percent while its benchmark refinancing rate is at a record low of 0.0 percent.

German 10-year bond yields, which indicate the country's likely cost of borrowing, fell in March but remain at around 0.5 percent.

Der Spiegel reported that a one percent increase in average interest rates in Europe's biggest economy would mean an additional 10 billion euros in costs which could complicate the new government's efforts to maintain a balanced budget.

A spokesman for the finance ministry declined to comment on the report.

Money markets are pricing in the ECB's first interest rate rise since 2011 next year and the eurozone central bank is also considering how and when to end its 2.55 trillion euro bond purchase scheme aimed at stimulating inflation and growth.

A possible trade war with the United States is a possible dampener on the outlook but German Economy Minister Peter Altmaier told Spiegel he was confident the EU and Washington would "find a sensible compromise by the summer" in trade talks.

Last week US President Donald Trump temporarily excluded the EU, the United States' biggest trading partner, and six other non-European countries from higher US import duties on steel and aluminium.

The higher tariffs are aimed at curbing imports from China. Altmaier said Germany agreed with the United States in wanting to tackle overcapacity in the global steel market, partly caused by China.

"We are looking for a common line in the fight against price dumping and intellectual property theft. We want to find solutions that are compatible with international trade rules," he told Der Spiegel.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


TRENDING

OPINION/BLOG/INTERVIEW

How music can help expectant mothers during pregnancy

Music provides pleasant ambience for all but its more important for expectant mothers as besides ensuring pleasant environment for them it also directly and indirectly influences the unborn babies. There are various scientific findings to c...

EdTech: A technical approach to flexible and cost-effective education

Its hight time for the world to go for innovative approaches like e-learning over traditional learning methods that need physical infrastructure, long-term planning, and huge investment. ...

Our school campaigns are our strongest ally: Joaquin Antuna, founder of Peace and Cooperation

Joaquin Antuna is the founder of Peace and Cooperation, a Spanish NGO which was nominated as peace messenger by the United Nations in 1986. Antuna is of very firm opinion that in order to have an incisive impact on the community we live in,...

'No escape from telephones', this 1953 prediction actually comes true

In 1953, a telephone company chief predicted that therell be no escape from telephones in the future....

Videos

Latest News

WhatsApp vulnerability: CERT-In issues advisory; company says users unaffected

An Indian cybersecurity agency has warned WhatsApp users against a vulnerability that can compromise their individual account without seeking permission even as the popular social messaging app said users have not been impacted. The Compute...

Two men held at airport for smuggling in Rs 22 lakh worth gold

Two men were arrested at the Delhi airport for trying to smuggle into the country gold worth Rs 22 lakh, the Customs department said on Wednesday. The accused were intercepted after their arrival from Dubai on Monday.A detailed personal and...

Sebi tightens disclosure norms on loan default for listed cos

Tightening its disclosure norms for listed companies, markets regulator Sebi on Wednesday asked them to report full facts of any loan default within 24 hours for any failure of repayment of principle and interest amount beyond 30 days. The ...

Microsoft to organise workshop for startups

Continuing its efforts to accelerate Indias startup ecosystem, Microsoft is organising here on Friday a technology workshop with business-mentoring and networking sessions ahead of sustained guidance to select firms. Organised in associatio...

Give Feedback