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Munich’s Ifo economic institute expects German inflation to fall below 2% in August.
Ifo based its forecast on a recent survey of companies’ pricing plans, which showed a slight decline in the number of companies planning to raise prices, particularly in industry and sectors close to consumption.
“As a result, inflation is likely to continue to ease slightly, falling below 2% in August for the first time since March 2021,” Timo Wollmershäuser, head of economic research at Ifo, said.
In May, consumer prices rose 2.4% year-on-year. The Federal Statistics Office Destatis will publish an advance estimate for June on Monday afternoon.
According to the Ifo survey, retail price increases will be smaller, mainly in the clothing and household appliances sectors, as well as in the arts, entertainment and leisure sectors. In the consumer electronics and bicycle retail sectors, the survey even predicts price falls.
However, there are also more companies in consumer-related industries that want to raise prices again. According to Ifo, these include food and beverage retailers, car dealers, catering establishments and hotels.
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