According to the head of the credit institution Dekabank, prosperity is threatened. This is due to the corona pandemic, the Russian war of aggression in Ukraine and inflation. Certain parts of the population could possibly be left behind by rising costs.
According to the head of Dekabank, Georg Stocker, prosperity in Germany is on the brink. “After Corona and supply chain problems, we now have the turn of the era, the energy turnaround, the globalization turnaround and – if we’re not careful – the turnaround in prosperity,” he said at a reception in Frankfurt on Monday, according to “t-online”. Above all, the war in Ukraine, inflation and the impending recession could fuel this.
The pandemic is also partly to blame. In the past two years, companies have increasingly relied on shorter supply chains – a practice that the ongoing war in Ukraine is now driving further. The “structural reorganization of the European economy” will therefore take many years to complete, which is why growth will “remain below the usual levels for quite some time,” explained Stocker.
Due to persistent inflation, prosperity “can no longer be taken for granted for the time being”, Stocker added, and warned that certain population groups could be left behind by the high costs of energy and food. But even people who can currently still save money would face problems given the current inflation rate of eight percent and the low key interest rate of the European Central Bank, which will be raised from 0.00 percent to 0.25 percent in July.
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“We are stuck in the real interest rate trap,” says Stocker. He advises: “In order to at least mitigate this effect, material assets and regular savings in securities remain very sensible.”
In addition to individual measures, however, the state must also become active and give its citizens a helping hand through “smart politics”. “Declining prosperity must not pose a threat to our social model,” said the head of Dekabank.