Fewer companies in Germany are looking to raise their prices. In February, the ifo price expectations slipped to 15.0 points, down from 18.8 points* in January. This was mainly due to the consumer-related sectors, where price expectations fell from 32.4 points* to 28.9 points. “This suggests that in the coming months, inflation will continue to decline,” says Timo Wollmershäuser, Head of Forecasts at ifo.
Fewer companies in Germany are looking to raise their prices. In February, the ifo price expectations slipped to 15.0 points, down from 18.8 points* in January. This was mainly due to the consumer-related sectors, where price expectations fell from 32.4 points* to 28.9 points. “This suggests that in the coming months, inflation will continue to decline,” says Timo Wollmershäuser, Head of Forecasts at ifo.
More of Germany’s consumer-related companies are planning to raise their prices. The ifo price expectations for these industries rose from 32.3 points* in December to 32.9 points in January. Price expectations increased noticeably among consumer-related service providers in particular, from 37.3 points* to 42.1 points. In retail, by contrast, the proportion of companies planning price increases declined; the balance there fell from 30.0 points* to 28.6 points. “This suggests that in the coming months, inflation will subside, but only slowly,” says Timo Wollmershäuser, Head of Forecasts at ifo.
More of Germany’s consumer-related companies are planning to raise their prices. The ifo price expectations for these industries rose from 32.3 points* in December to 32.9 points in January. Price expectations increased noticeably among consumer-related service providers in particular, from 37.3 points* to 42.1 points. In retail, by contrast, the proportion of companies planning price increases declined; the balance there fell from 30.0 points* to 28.6 points. “This suggests that in the coming months, inflation will subside, but only slowly,” says Timo Wollmershäuser, Head of Forecasts at ifo.
Many countries around the world experienced a sharp decline in economic activity during the Covid-19 pandemic, followed by a gradual recovery. With high inflation, geopolitical conflicts, and ongoing supply chain disruptions, many regions of the world are once again facing uncertain economic development in the coming years. In the Economic Experts Survey for the fourth quarter of 2023, we therefore asked economic experts about their expectations for (real) GDP growth in 2024 (short-term forecasts) as well as in 2025 and 2027 (medium- and longer-term forecasts).
The ifo Institute’s Dresden Branch has spoken out in favor of linking the retirement age to rising life expectancy. “Some of our neighboring countries have already decided to do this, such as the Netherlands, Sweden, and Finland,” says ifo pension expert Joachim Ragnitz.
How are economists’ expectations for future price developments evolving worldwide? Can we observe a decline in inflation expectations? The latest wave of the Economic Expert Survey (EES) by the ifo Institute and the Institute for Swiss Economic Policy examines economists’ inflation expectations at a global level. The result: although inflation expectations worldwide remain well above central banks’ inflation target, there is a further decline in the expected inflation rate for 2024 compared to previous quarters.
Les économistes du monde entier anticipent une baisse des taux d’inflation dans les années à venir. C’est ce qui ressort de l’Economic Experts Survey (EES), un sondage trimestriel réalisé par l’Institut ifo et l’Institut de politique écono-mique suisse IWP. D’après ce sondage, le taux d’inflation mondial atteindra 5,0% en 2024, avant de retomber à 4,4% en 2025 et à 3,6% en 2027. Cette année, l’inflation sera de 3,2% en France, de 3,7% en Belgique et de 2,0% en Suisse. « Les prévisions concernant l’inflation sont beaucoup plus basses cette année que l’année dernière », constate Niklas Potrafke, chercheur de l’Institut Ifo. Pour l’Allemagne, ils tablent sur 3,4%.
Economic experts from around the world expect inflation rates to decline in the years ahead, finds the Economic Experts Survey, a quarterly survey conducted by the ifo Institute and the Swiss Economic Policy Institute. According to this survey, the inflation rate worldwide will reach 5.0 percent in 2024, then 4.4 percent next year, and 3.6 percent in 2027. In the US, inflation for this year is expected to reach 3.2 percent, in the UK 4.3 percent, and in Ireland 3.0 percent. “Compared to last year, inflation expectations for this year are significantly lower,” says ifo researcher Niklas Potrafke. Germany will have a rate of 3.4 percent.
The majority of German companies have already paid their employees a tax- and duty-free inflation compensation bonus; 72% of the personnel managers surveyed by the ifo Institute reported making the payment. A further 16% of companies plan to pay out this bonus in the near future. “The main reason for paying this bonus is to increase employee motivation,” says ifo expert Daria Schaller.
The business situation for Germany’s retailers has deteriorated. The indicator fell from -8.8 points in November to -12.1 points in December. “For many retailers, business in the first weeks of the holiday season wasn’t as good as they had hoped,” says ifo expert Patrick Höppner. Their expectations for the coming months also darkened further and remain largely pessimistic.