(Bloomberg) -- Germany may already be at the start of a phase combining economic stagnation with rapidly rising consumer prices, according to a senior adviser to Finance Minister Christian Lindner.

A hoped-for pickup in growth in the second quarter after the lifting of pandemic restrictions hasn’t materialized and inflation has exceeded expectations, Lars Feld, a professor of economic policy who advises Lindner, said at a news conference in Berlin.

Germany is “at the very least facing a high risk of stagflation, if not already at the beginning of this stagflation,” Feld said. The government should respond with measures that can help boost capacity, he added.

Lindner and Feld were speaking at a joint news conference presenting a new strategy paper outlining the government’s finance policy response to the war in Ukraine, as well how it plans to address the lingering effects of the coronavirus pandemic.

Entitled “Finance policy during the turning point -- strengthen growth and avoid inflationary impulses,” the paper details plans to focus on stabilizing Europe’s biggest economy, boost growth and mobilize investment, and build a “fiscal buffer” to help cope with any future crises.

“The war and the enormous supply chain problems and production bottlenecks have fundamentally changed the broad economic environment,” Lindner said, noting that “the prices of many good and services are rising more quickly that at any time in the past four decades.”

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