According to Joachim Nagel, President of the Bundesbank, Germany’s annual inflation stands at about 2.7 percent. He cautioned the “Redaktionsnetzwerk Deutschland” that this figure could climb higher under adverse global conditions.
Nagel stressed that the stability of the Strait of Hormuz is critical, calling it “the Achilles’ heel of the global economy”. He warned that the conflict in Iran alone would significantly drive up the cost of living in Germany.
However, the President noted that logistical blockades via Hormuz are not the sole threat. The war has also resulted in the destruction of facilities used for the production and processing of crude oil and natural gas. It would take a significant amount of time for these refineries to regain their previous output volumes. Therefore, even assuming the Strait of Hormuz becomes fully operational again, Nagel warned that high energy prices could persist for an extended period.
Furthermore, he pointed out that increased insurance premiums for cargo ships could further inflate prices due to the higher risks expected in the future. These accumulating factors, he concluded, paint a negative outlook for the economy.
