The country's central bank chief said last week that Germany's inflation rate could surge over 10% this fall due to the country's energy squeeze.
The comments were published on Saturday, just a day after the announcement of a three-day shut down of the key Nord Stream 1 line. From August 31 to September 2, the line will be shut down.
As a result of the development, natural gas prices went up, as Gazprom had already cut the gas flows to just 20% of its capacity. Germany, which is highly dependent on Russian gas, has accused Russia of weaponizing gas to retaliate against sanctions over the Ukraine war.
According to an official transcript from the German central bank, the issue of inflation will not go away in the future. There are likely to be more supply shortages.
The country's statistics office said that Germany's economy was stagnant in the second quarter of the year. According to the statistics office, inflation rose to a 40-year high in July due to high energy prices.
In June of this year, the German central bank had predicted inflation to reach 4.5%, but according to Nagel, it is likely to average over six percent.
An ongoing summer heatwave in Germany has caused the Rhine to dry up, disrupting a key transportation route for energy shipping.
The economic prospects for the second half of the year would get worse if further delivery problems are added. The energy crisis is likely to cause a recession next winter.
If Russian gas is cut completely, German industry leaders warn of economic hardship. Europe's largest economy has begun to turn off heating and lights.
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