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Ifo expects inflation below two percent in August

Companies in Germany want to raise prices somewhat less frequently. The Ifo Institute expects inflation to fall below two percent again in the near future.

Purchasing: The Ifo Institute expects inflation to fall to below two percent in the coming months. ...
Purchasing: The Ifo Institute expects inflation to fall to below two percent in the coming months.

Price development - Ifo expects inflation below two percent in August

The Ifo Institute expects inflation to drop below two percent in August. This is based on a recent survey of companies regarding their price plans, which shows that fewer businesses in industry and consumer-facing sectors intend to raise their prices. "Therefore, the inflation rate's decline may continue gradually and fall below the two-percent mark for the first time since March 2021 in August," says Ifo Business Cycle Research Institute head Timo Wollmershauser. In May, the national inflation rate was 2.4 percent. The estimate for June will be announced by the Federal Statistical Office today.

According to the survey, there are fewer price increases in the retail sector, particularly in clothing and electrical household appliances, as well as in the arts, entertainment, and leisure industries. However, signs point to falling prices in consumer electronics and the bicycle trade.

However, there are also consumer-facing sectors where more businesses plan to raise prices. According to Ifo, these include food and beverage retailing, the automobile trade, and the hospitality and catering industries.

The expected decrease in inflation below two percent in August, as stated by the Ifo Institute, could potentially influence the price development in retail trade across Germany, including Munich. With fewer businesses in various sectors like industry and consumer-facing sectors planning price increases, prices might remain stable or even decrease for consumers. Nevertheless, some sectors like food and beverage retailing, the automobile trade, and the hospitality and catering industries, may continue to see price increases, affecting consumers' purchasing power.

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