Inflation Rate in Germany Remains Above 2%
ifo price expectations in Germany fell slightly to 18.7 points in March, down from 19.3 points* in February. By and large, the leading indicator for price developments in Germany is thus continuing to move sideways, as it has done so for almost two years now. “The inflation rate is therefore likely to remain largely unchanged at just over 2% in the coming months,” says Timo Wollmershäuser, Head of Forecasts at ifo.
In the retail sector, price expectations fell to 29.7 points, down from 32.8 points* in February. Price expectations for consumer-related service providers, on the other hand, rose slightly to 27.0 points, up from 26.9 points* in February. Among business-related service providers (including wholesalers), there are also slightly more companies that want to raise rather than lower their prices. The indicator rose to 22.0 points, up from 21.9 points* in February. Price pressure has eased in manufacturing and construction, with price expectations dropping to 8.5 and 0.2 points respectively, down from 10.7* and 0.8* in February.
The points for the ifo price expectations indicate the percentage of companies that intend to increase prices on balance. The balance is obtained by subtracting the percentage of companies that want to lower their prices from the percentage of those that want to raise their prices. If all the companies surveyed intended to increase their prices, the balance would be +100 points. If they all wanted to lower their prices, it would be −100. The balance was seasonally adjusted. The ifo Institute does not ask about the amount of the planned price change.
* Seasonally adjusted
Publication
ifo Konjunkturperspektiven is a monthly German-language online publication that presents the latest results from ifo’s business surveys in the form of graphics and tables.
