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Inflation: Fewer companies want to raise prices

Inflation: Fewer companies want to raise prices

Current data from the Ifo economic survey suggests a further fall in inflation. In summer it could even fall below 2 percent.

The Ifo Institute expects inflation to fall further. It is “continuing to decline and is likely to fall below the two percent mark in the summer,” said the economic director of the Munich Institute, Timo Wollmershäuser. The latest data collected by economic researchers also contributes to this assessment, according to which fewer and fewer companies want to increase the prices for their products.

The so-called Ifo price expectation has therefore fallen to its lowest value since March 2021. In March 2024 it was 14.3 points – after 15 in February. In 2022 it was still well over 50 points. The indicator shows how much the proportion of companies that want to increase prices outweighs the proportion of companies that want to reduce prices. Theoretically it can take on values ​​between minus and plus 100. How much the prices should fall or rise is not asked.

There were significant declines in consumer-related sectors – including retail, where the sub-index fell by 4.1 to 24.6 points. In the catering industry the value even fell by 24.9 to 29.5 points. However, both are still above the average for the overall economy.

The figures from the construction industry indicate falling prices. Price expectations here are at minus 10.6 points, another 4.4 points lower than a month ago.

Price expectations rose slightly in the manufacturing sector. However, at 6.4 points – an increase of 1.4 – the value there is still rather low.

Source: Stern

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