“This is one of the most important Spring Meetings,” Bundesbank President Joachim Nagel said at a press breakfast with Germany’s acting Federal Finance Minister Jörg Kukies on the occasion of the Spring Meetings of the International Monetary Fund (IMF) and the World Bank. 

“We know what we’ve got, and what we’ve had, with the IMF and the World Bank. Multilateralism is a core element of the global economic order.”

He sees the new US tariff regime and the resulting disruptions potentially leading to a marked decline in global growth. According to Nagel, the IMF is now expecting global gross domestic product (GDP) to rise by only 2.8% in 2025, having assumed 3.3% growth back in January.

In Nagel’s view, the higher US tariffs could also cloud the euro area growth outlook: model calculations by the Bundesbank indicate that they could dampen euro area GDP by ½% over the medium term. The IMF reduced its growth forecast for the euro area slightly to 0.8%.

On the sidelines of the Spring Meetings, Nagel told Reuters that Germany, with its export-oriented economy, was highly vulnerable to the announced tariffs. “The fact that the global economy has gained momentum has changed as a result of the tariffs,” he said at the press conference. The Bundesbank President mentioned that the United States had been Germany’s largest trading partner in 2024, with two-way goods trade totalling €253 billion last year. 

US tariffs will particularly affect inflation in the United States 

Nagel told Reuters that he believed the tariff-related impact on inflation would be more of a factor in the United States than in Europe. Inflation in the euro area was currently showing positive developments, he also pointed out at the press breakfast. He expects the ECB to hit its 2% target over the course of the year. 

However, the Bundesbank President saw the further trajectory of inflation as uncertain, particularly in times like these: he therefore regards it as all the more important for the Governing Council of the ECB to make data-dependent decisions on a meeting-by-meeting basis. 

“Independence is the hallmark of a central bank,” Nagel stressed. In light of the current debate, he noted that the US Federal Reserve had done an excellent job of fulfilling its mandate.