The Ifo Institute sees the first signs of a slowdown in inflation in the second half of the year. The reason for this is that on balance fewer companies want to raise prices, as the Munich economic researchers announced on Friday, citing a survey.
The Ifo Institute sees the first signs of a slowdown in inflation in the second half of the year. The reason for this is that on balance fewer companies want to raise prices, as the Munich economic researchers announced on Friday, citing a survey.
This balance – the percentage of companies that want to raise prices minus the percentage that wants to lower prices – is currently 57.8, the second highest value since 2005, said Ifo economic chief Timo Wollmershäuser. “But the trend suggests that the monthly rates of inflation will fall from over 7 percent to under 6 percent in the second half of the year.” For the year as a whole, he expects around 6 percent.
The decline in price expectations is affecting almost all sectors. There was only a slight increase in retail. It now also has the strongest tendency to increase prices: Here the proportion of companies with price increase plans outweighs those without by 77.4 percentage points. In wholesale the overhang is 68.1 percentage points, in industry it is 67.4 points. This is followed by construction with 56.9 and service providers with 46.7 percentage points. The Ifo does not ask how much the companies want to raise their prices.
The price expectation index had risen almost continuously since a corona hole in 2020, when it briefly became slightly negative. In the second half of 2021, it then reached levels above 40 points for the first time in a long time, before reaching a long-term high of 61.8 last month.
