Inflation has probably not yet peaked. Energy and food prices have already risen sharply in recent months. Retailers expect this trend to continue.
In the coming months, people in Germany will probably have to dig even deeper into their pockets for groceries. According to a survey by the Munich Ifo Institute, almost every retailer is planning higher prices. Farm President Joachim Rukwied is particularly concerned about the consequences of a lack of gas and warned of a food shortage in this case: “Without gas, no milk, no butter, no yoghurt.”
Ifo Institute: Retailers are planning further price increases
According to an Ifo survey in June, the price expectations of retailers for food and beverages were 98.9 points. This means that almost all respondents are planning price increases.
The points indicate what percentage of the companies want to increase their prices. The balance is obtained by subtracting the percentage of companies that want to lower their prices from the percentage of companies that want to raise their prices. If all the companies surveyed want to raise their prices, the balance would be 100 points, if all want to lower them, it would be minus 100 points.
The higher price expectations also apply to the other retail sectors, as reported by the Ifo Institute. Price expectations rose there to 78.6 points. “This means that inflation rates are likely to remain high for the time being,” said Ifo economic chief Timo Wollmershäuser.
Only on Wednesday did the Federal Statistical Office in Wiesbaden forecast inflation of 7.6 percent year-on-year for June. Although inflation has slowed down somewhat, it is still at a very high level. Food prices rose above average by 12.7 percent.
However, the Ifo Institute also stated that there are first signs that the inflation rate could “gradually fall again” later in the year. The price expectations in some sectors of the economy, whose production is upstream of consumption, fell for the second time in a row. These include industry, construction and wholesale.
“We need gas to be prioritized for the entire agricultural and food sector,” said Rukwied, President of the German Farmers’ Association, to the “Rheinische Post”. The declaration of the alarm level of the gas emergency plan made him very concerned. The availability of fertilizers is essential for stable harvests and gas is required for nitrogen fertilizers. If fertilizer is only available to a limited extent or is no longer available, “yields would immediately drop by 30 to 40 percent”.
Inflation is already causing problems for 40 percent of Germans
As far as food prices in Europe are concerned, the level differs significantly in some cases. According to the Federal Statistical Office, outliers can be observed with meat, among other things: In Switzerland, for example, it costs twice as much as in Germany (plus 101 percent), in Norway it is 25 percent and in Luxembourg 17 percent. Meat is cheaper than in Germany in Croatia (minus 30 percent), Spain (minus 24 percent) and Portugal (minus 23 percent).
The differences are also clear when it comes to alcohol: in Iceland there is an increase of 257 percent, in Norway it is 217 percent and in the Netherlands and France it is 17 and 16 percent, respectively. In a European comparison, it was only slightly cheaper in Austria and Hungary.
A majority of Germans do not consider the measures to cushion the sharp price increases to be sufficient. According to the ZDF political barometer, 61 percent of those surveyed said so. 40 percent of people are personally concerned about inflation, up from 34 percent three months ago. At the end of June, 1,186 eligible voters were surveyed.