BERLIN  A moderate restrictive fiscal policy required to conform with Germany's debt brake is taking inflation in the right direction, Finance Minister Christian Lindner said on Monday.

"The debt brake is an inflation brake," Lindner said at an event to commemorate the 15th anniversary of the constitutional limit on public deficits, which is set at 0.35% of gross domestic product.

Inflation in Europe's largest economy slackened to 2.3%helped by lower food and energy prices, final data showed on Friday. This is its lowest level since June 2021.

In the United States, expansionary public finances with high levels of new debt are driving inflation up again, Lindner said.

U.S. consumer prices increased more than expected in March, data showed last week, marking a third straight month of strong readings.

"The debt brake is a call to set clear priorities in policies," he said.

Lindner said the current government would invest 58 billion euros ($61.84 billion) this year, considerably more than the 38 billion euros spent in 2019, when interest rates and the economic environment were more favourable.

The minister said there was no need for a fundamental reform of the debt brake but some room for manoeuvre when it comes to debt repayments, what could free up additional funds of up to 12 billion euros per year.

The German government took out emergency loans totalling around 300 billion euros in response to the coronavirus pandemic and the war in Ukraine.

Lindner said there could be additional funds available for investment if debt levels returned to the 2019 pre-pandemic level before to end of this decade.

  - Reuters