Fewer German Companies Plan To Raise Prices: Ifo

Fewer German businesses have immediate plans to raise their prices in December than a month ago amid hopes of a slowdown in consumer and producer prices, the latest survey conducted by ifo Institute showed on Tuesday.

For the economy as a whole, the price expectations measure declined to 40.3 points in December from 46.2 points in November.

The points for the ifo price expectations indicate the percentage of companies that intend to increase prices on balance.

Price expectations fell the deepest in manufacturing and construction, with the measure easing from 53.3 points to 42.0 points, and from 38.4 points to 28.3 points, respectively.

Similarly, fewer companies are planning to raise their prices in the trade and the service sectors.

“This means that increases in producer and consumer prices are likely to gradually slow down in the months ahead,” said Timo Wollmershauser, head of forecasts at ifo. “Inflation rates will, however, remain high.”

At the same time, food retailers are planning to raise their prices the most, with the price expectations index standing at 83.7 in December versus 94.7 in November.

Germany’s headline consumer price inflation eased sharply to 8.6 percent at the end of 2022, thanks to lower energy prices and the government’s efforts to share the energy bill burden of the people.

Producer price inflation eased to reach its lowest level in nine months in November, amid a slowdown in the price growth of energy.

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