German Companies Expect Falling Inflation

by Warren Seah

According to a recent survey by the Ifo Institute, German companies are projecting a further easing of price increases in the coming months. This indicates a continued trend of falling inflation in the country.

Decrease in Price Expectations

In August, Ifo’s index for price increases dropped to 14.7 points from the previous month’s seasonally adjusted 16.3 points. The index calculates the balance by subtracting the percentage of companies looking to reduce prices from those wanting to raise them.

Timo Wollmershaeuser, head of forecasts at Ifo, mentioned that the decline in inflation will be a challenging and lengthy process. While price expectations declined slightly among retailers, the hospitality sector, and the food-and-drinks trade, there is a notable decrease in manufacturing.

Mixed Picture in Manufacturing

Although price increases have almost come to a halt in manufacturing, it is important to note that car manufacturers still have plans to raise prices on average. On the other hand, paper manufacturers are anticipating price cuts.

Services Providers and Construction

While services providers are looking to increase prices, they expect a slower rate of increase. In the construction sector, prices are anticipated to fall at a faster pace.

Overall, these findings give insights into the current state of price expectations across various sectors in Germany.

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