U.S. Markets

Germany's Scholz: Don't expect higher interest rates for years

German Vice Chancellor and Finance Minister Olaf Scholz speaks on stage during the "Open Door Day" of the Federal Ministry of Finance in Berlin, Germany, August 17, 2019. REUTERS/Annegret Hilse

BERLIN (Reuters) - German Finance Minister Olaf Scholz said on Saturday that he expected interest rates to remain very low for “the next few years”, adding that companies should seize the opportunity of near-zero borrowing costs to boost private sector investment.

The European Central Bank has already signaled even more monetary stimulus for the euro zone economy, hoping to arrest a downward spiral that could lead to an economic recession.

Asked by a member of the public during a government open day about his view on the outlook for interest rates, Scholz said: “I also believe that the time of higher interest rates can come up every now and then, but that will not happen in the next few years because of central bank policies.”

Scholz said that central banks around the world were currently pursuing a loose monetary policy, including the ECB.

“What I would wish for is more investments by the private sector,” Scholz said, pointing to a much higher willingness of companies and investors in the United States to put fresh money into new projects or business ideas.

“My wish is that we also achieve such a cultural change here,” Scholz said.

Asked by a younger visitor during a panel discussion in the finance ministry if he had a good investment tip in times of zero interest rates, Scholz laughed and said he was probably not even allowed by law to give such advice.

But he added: “Just don’t do it my way. I simply put it in my savings account.”

Reporting by Michael Nienaber; Editing by Hugh Lawson