BERLIN (Sept 21): Economic growth remains a big challenge for Germany, German Finance Minister Christian Lindner said on Thursday.

"Growth remains a major challenge," he said. "We have to strengthen growth in Germany, not through government demand programmes that could fuel inflation, but more on the supply side," Lindner said at an event organised by Handelsblatt.

He said that fighting inflation is a priority for the government, with a "moderately restrictive" fiscal policy, in line with the European Central Bank's tightening of monetary policy.

"It is like a fire - not only the fire is dangerous, also the water to extinguish it could be dangerous," Lindner said, in reference to expansive fiscal policies that could spur inflation and lengthen the central banking campaign to tame it.

The finance minister said that this year, for the first time since the pandemic in 2020, the debt ratios and the deficit ratio in the national budget were falling.

"Despite the turnaround to a moderately restrictive budgetary policy, we have record investments," he said, in reference to the 2024 budget — the budgetary plan targets €54.2 billion (US$57.77 billion or RM270.84 billion) in investments next year.