Because fewer and fewer companies want to raise their prices, the Ifo Institute expects inflation to fall. The index for price expectations fell in March for the sixth month in a row to 27.2, as the institute in Munich announced on Wednesday. That’s a minus of two points. In April 2022, the value was still well over 60.
“Companies have already passed on a large part of their increased costs to customers, while demand has decreased at the same time,” explained Ifo economic chief Timo Wollmershäuser. “This means that inflation should slowly decline in the coming months.”
However, the current value shows that there are still significantly more companies wanting to raise prices than lower them. The index is calculated by subtracting the proportion of firms planning to lower prices from the percentage of firms planning to increase prices over the next three months.
Most price increases are planned in retail with an index reading of 49. Toys (86.3), electrical household appliances (72.6) and food (64.5) in particular are often more expensive. Service providers are facing more price increases than a month ago: the index rose by three points in this sector to 34.7 points. (dpa)