German companies’ current pricing plans indicate a pause in the decline in inflation. The price expectations index collected monthly by the Munich Ifo Institute rose slightly by 0.8 to 15.1 points in April, as the economic researchers announced. “In the coming months, inflation is unlikely to decline any further and will remain at just over two percent,” expects Ifo expert Sascha Möhrle.
This means that the Ifo is a little more skeptical than it was a month ago, when price expectations had fallen to their lowest level since 2021. At the time, economics chief Timo Wollmershäuser said: “Inflation is continuing to decline and is likely to fall below the two percent mark in the summer.”
Where are prices rising?
In the consumer-related areas, price expectations rose by 1.2 points to 25.8. It is likely to become more expensive, especially in the catering industry, in toy retail and drugstore items. When it comes to food, however, significantly fewer companies are planning price increases. The situation is similar for hotel owners and tour operators.
Prices are predominantly falling in the construction industry, where the index is currently at minus 7.7 points after minus 10.7 in March. In industry it fell slightly from 6.3 to 6.0.
The price expectations index is calculated by subtracting the percentage of companies that want to increase their prices from the percentage of companies that want to lower them. Values above 0 show that more companies want to increase prices. Theoretically, values from minus 100 to plus 100 are conceivable. How much the prices should rise or fall is not asked.
Inflation in Germany had recently weakened significantly. The Federal Statistical Office wanted to announce on Monday afternoon how consumer prices developed in April using preliminary figures.
