ifo survey: Many companies want to raise prices

Created: 01/19/2022, 09:41 am

Price increases are expected, especially in the retail sector, which includes supermarkets such as Aldi and Lidl.

© Uwe Anspach/dpa

Inflation in Germany rose sharply last year.

According to the Ifo Institute, companies are also preparing for rising prices in the current year.

Munich - German consumers and companies must prepare for further price increases.

The barometer for price expectations fell only slightly to 44.6 points in December and thus remained only 0.3 points below the historic high reached in November, as the Munich Ifo Institute announced on Wednesday in its survey in which companies asked about their plans for Price increases in the coming three months will be surveyed.

Prices: Companies pass on rising costs

"This will have an impact on consumer prices," said Ifo economics chief Timo Wollmershäuser. "Inflation will only fall slowly over the course of this year." In the coming months, the inflation rate is likely to be above the four percent mark and only gradually approach the two percent mark towards the end of 2022. An inflation rate of around three and a half percent is now expected for the year as a whole.

"Companies pass on the increased costs for energy and for the procurement of primary products and merchandise," said Wollmershäuser. Even if the rise in energy prices does not continue in the coming months and the prices for natural gas, electricity and crude oil remain unchanged, this will ensure high inflation rates for a while. Because the increase in consumer prices is always measured in comparison to the previous year. According to this, consumers would have to spend an average of ten percent more on energy this year.

Wage costs, on the other hand, should not add to inflation.

"The wage negotiations so far indicate no wage-price spiral," said Wollmershäuser.

“We expect collective wages to increase by almost two and a half percent this year and next.

That would then be as strong as the average of the years before the corona crisis.

In retail, price expectations are high

The very high survey values ​​run through all sectors of the economy.

In retail, price expectations are at 60 balance points, followed by wholesale at 57 and industry at 55. A value of 42 was achieved in construction.

The lowest value of 34 balance points was measured for service providers.

Nevertheless, this represents a new record for this branch of the economy. The balance values ​​for price expectations indicate the percentage of companies wanting to increase their prices.

The percentage of those who want to lower their prices is deducted.

Neutral answers will not be considered.