Businesses seek to increase costs.
An increasing number of businesses plan to boost their prices, as per findings by the Ifo Institute. Yet, they anticipate a decrease in inflation rates in Germany. The Ifo Institute's Price Expectation Index went up from 15.2 points in April to 16.2 points in May, as revealed in a report on Friday, Munich.
The trend of price hikes can be observed in the industrial sector and wholesale trade. However, the number of service providers and retailers intending to hike their prices has dwindled. "It's likely that the inflation rate may decline further in the upcoming months and even go under the 2% marker for the first time since March 2021 in August," commented Timo Wollmershauser, the Economic Research Director at the Ifo Institute.
The Ifo Institute's survey showed that only 36% of drugstores, 23% of retailers, 26% of eateries, 22% of hotels, and 24% of consumer services providers wish to raise their prices. Last month, these figures were higher. The surplus was calculated by subtracting the percentage of companies wishing to reduce prices from those wishing to increase them. The Ifo Institute doesn't inquire about the specifics of the planned price alterations.
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Despite the trend of price increases in the industrial sector and wholesale trade, the number of service providers and retailers planning to raise their prices has decreased. However, more companies might consider this option if the anticipated decrease in inflation rates in Germany materializes as expected.
