Ifo Institute sees inflation on the retreat
The economic research institute Ifo sees easing price pressure in Germany. The inflation rate is likely to rise temporarily to around 4 percent in December, said Ifo economic researcher Timo Wollmershäuser according to a press release. However, this is mainly due to a base effect. In the previous year, gas prices in the consumer price index had fallen sharply, as the state had borne the costs for the December discount. "But the inflation rate will already fall to below 3 percent at the beginning of next year," the expert predicted.
The consumer price data for November is due on Wednesday. The Federal Statistical Office will publish the index at 2 p.m., with experts expecting the annual inflation rate to fall from 3.8 to 3.5 percent. Figures for individual federal states are already available beforehand.
According to an Ifo survey, slightly more companies want to increase their prices. The index of price plans rose to 18 points in November from 15.4 points in October. According to the experts, this is mainly due to business-related service providers and wholesalers. The balance there rose from 21.5 to 28.3 points.
In the consumer-related sectors, on the other hand, price expectations continued to fall: in food retailing, the balance fell from 40.7 to 34.2 points, in other retail from 28.2 to 27.7 points and in consumer-related service providers from 29.3 to 25.5 points.
Despite the temporary increase in prices due to a base effect, Ifo Institute's economic researcher predicts a decrease in inflation to below 3% at the start of next year, signaling a potentially favorable economic situation for consumers. This prediction contrasts with the increased price plans reported by some companies, particularly business-related service providers and wholesalers, as indicated by the Ifo survey.
Source: www.dpa.com
