German central bank estimates inflation at 5% this year

ANKARA

German Federal Bank President Joachim Nagel said Wednesday that the bank estimates inflation at 5% this year, raising its forecast once again.

"We already thought in February that inflation could conceivably come to 4.5%. The Bundesbank’s experts now believe that the inflation rate could reach 5% on average for the year," Nagel said in a statement.

"The euro area is also expected to record a high rate of inflation. We need to keep our sights trained on the normalization of our monetary policy," he added.

This marked the second upward inflation revision in less than a month after Nagel said on Feb. 9 he expects inflation above 4% this year.

Regarding the Russian war on Ukraine, Nagel said he "decisively" supports the agreed financial sanctions imposed on Moscow.

"It is not yet possible at the present time to reliably estimate what effects the war will have on economic developments in Germany. What is clear is that a further surge in energy prices will also affect consumer prices," he said.