Ifo price expectations
Both companies and consumers will have to expect further price increases. This was reported on Wednesday by the Ifo Institute, which published the results of a corresponding survey.
For the so-called Ifo price expectations, the Munich-based research institute asks companies about their plans for price increases in the coming three months. According to the survey, Ifo price expectations fell only slightly in December to 44.6 points. In November, they were at an all-time high of 44.9 points, the institute notes.
Only slow decline in inflation expected
Commenting on price developments, Timo Wollmershäuser, head of Ifo’s economic forecasts, says: “Inflation will decline only slowly in the course of this year. In the coming months, monthly rates will still exceed 4 percent and only gradually approach the 2 percent mark toward the end of 2022.” For the whole year, Wollmershäuser said the Ifo Institute expects inflation to be around 3.5 percent.
Passing on higher costs
Companies are passing on the increased costs for energy as well as in the procurement of intermediate products and merchandise, explains Timo Wollmershäuser.
The Ifo Institute goes on to explain that inflation rates could remain high for some time, even if the rise in energy prices does not continue and the stock market prices for natural gas, electricity and crude oil remain unchanged. This is because the increase in consumer prices is always measured in comparison with the previous year.
High survey values in all sectors of the economy
The Ifo Institute points out that the very high survey values apply to all sectors of the economy. In wholesale, price expectations are at 57 balance points and in industry at 55. For construction, the press release mentions a balance value of 42. The lowest value of 34 balance points was measured for service providers, writes the Ifo Institute. However, this is a new record value for service providers.
Explanation of the balance values
According to the Ifo Institute, the balance values for price expectations indicate the percentage of companies that want to increase their prices. The percentage of companies planning to cut prices is subtracted from this figure. Neutral responses are not taken into account. In addition, the Ifo Institute mentions in its current release that the balance has been seasonally adjusted.
Source: www.kloepfel-consulting.com