The Munich Ifo Institute sees the peak of the inflation wave as past, but only expects a very slow decline in inflation. According to the monthly index of price expectations in the German economy, published on Thursday, a good one in five companies still wants to increase prices in the next three months.
The monthly price expectation index fell to 21.5 points in April, down from 27.1 in March. “The wave of price increases should have already passed its apex,” said Timo Wollmershäuser, head of Ifo economic research, on Thursday.
The index points indicate what percentage of companies want to increase their prices on balance. The bad news for consumers: the proportion of companies with price increase plans in the retail sector is much higher than average; the index in this sector only fell from 48.7 to 43.2 points. Even with the “consumer-related service providers” – these include restaurants and hairdressers – an above-average number of companies want to raise prices.
“Therefore, inflation should only drop very slowly in the coming months,” said Wollmershäuser. Above all, the core rate – consumer prices excluding energy – will remain high. (dpa)