Inflation in Germany has peaked, IFO researchers say

Berlin, Jul 28: Prices for consumer products in Germany are likely to sink again in the second half of 2022 after months of inflation, a leading economic research institute said on Thursday.

The number of companies intending to raise their prices over the next quarter has sunk for the third month running, said the ifo Institute, citing its latest survey.

"Prices may continue rising, but the tempo will slow. That means inflation has reached its highest point and will go down in the course of the second half of the year," said IFO's head of business cycle analysis and forecasts, Timo Wollmershäuser.

What else did IFO say?

Wollmershäuser said that the price expectations of businesses tend to take a few months to be reflected in consumer prices.

The construction sector and industry had seen the clearest reduction in these expectations, he said.

However, prices in sectors that more directly affect consumers, such as hospitality, leisure, culture and entertainment, were also likely to climb more slowly, according to IFO.

The one big exception is the food retail sector, where there was no end to inflation in sight, the institute said, with all companies in the survey wanting to raise their prices.

Inflation in Germany reached 7.6% in July.

Source: DW