Price pressure is also increasing noticeably in the sectors of the economy that are upstream of private consumption.
(Photo: dpa)
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Berlin In Germany, in view of higher costs, more companies than ever before want to raise their prices in the next three months. The corresponding barometer climbed to a high of 54.6 points in March after 47.6 in February, as the Munich Ifo Institute announced on Wednesday in its monthly company survey.
“Russia’s attack on Ukraine is not only driving up energy costs, but also the prices of many agricultural commodities,” said Timo Wollmershäuser, head of Ifo economic forecasts. “This means that the inflation rate is likely to rise to well over five percent this year.” The last time that happened in Germany was more than 40 years ago, when the inflation rate climbed to 6.3 percent after the second oil price crisis in 1981.
Above all, customers in the consumer-related sectors must expect sharply rising prices: In the food retail sector, price expectations have risen to 94.0 points, in the rest of the retail trade to 68.2 points and for consumer-related service providers to 64.0 points.
Price pressure is also increasing noticeably in the sectors of the economy that are upstream of private consumption. Price expectations increased to 78.1 points in wholesale, to 66.3 points in industry, to 48.9 points in construction and to 42.7 points for service providers.
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The points in the price plans indicate what percentage of the companies want to increase their prices on balance. The balance, in turn, is obtained by subtracting the percentage of companies that want to lower their prices from the percentage of companies that want to raise their prices.
If all the companies surveyed intended to increase their prices, the balance would be plus 100 points. If everyone wanted to lower their prices, it would be minus 100. The Ifo Institute does not ask about the amount of the planned price change.
More: Four billion-dollar risks that are now endangering the profits of top German corporations
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