Companies Want to Raise Prices in Germany
Companies in Germany are planning to raise their prices further. Their price expectations for the next three months rose to a new high of 46 points in January, according to a recent survey by the ifo Institute. The index had stood at 44.7* points in December and at 45* points in November. “Companies are passing the increased cost of energy and of procuring intermediate products and merchandise on to their customers. Those increases will filter down to consumer prices,” says Timo Wollmershäuser, Head of Forecasts at ifo.
“This means monthly inflation rates will remain above 4 percent for a while. We have therefore raised our inflation forecast for 2022 to 4 percent. In December, we were still assuming a 3.3 percent increase in the cost of living,” Wollmershäuser adds. The very high values for the index run through all sectors of the economy. They were particularly high in wholesale at 60.3 points, followed by retail (57.7 points) and manufacturing (55.6 points). In the service sector, the index reached a new high of 41.9 points. In construction, the figure was 41.5 points.
These balance values for price expectations indicate the percentage of companies that intend to increase prices minus the percentage of companies that intend to lower their prices. If all the companies surveyed intended to increase their prices, the balance would be plus 100 points. If they all wanted to lower their prices, it would be minus 100. Neutral responses are disregarded. The balance was seasonally adjusted. The ifo Institute does not ask about the amount of the planned price change.
*Seasonally adjusted
