The German newspaper Der Spiegel reports on the plans of almost all German food companies to raise prices of products due to the record rise in inflation in the country, and also cites a disappointing forecast of the possibility of double-digit inflation in the economy amid the anti-Russian sanctions.
Virtually every company in the food industry plans to raise prices, the newspaper said citing the Ifo Institute. According to Ifo, Germany, particularly the food sector, has started the new quarter poorly, increasing the risk of worsening inflation.
“The economic outlook in Germany does not look bright: food is becoming increasingly expensive, the industry has started the quarter poorly and inflation is unlikely to stop any time soon. That’s the conclusion of the Ifo Institute,” writes the publication.
Many companies have already publicly announced their desire to significantly raise product prices. In August, the Ifo price expectations index was 47.5 points, just 0.1 point lower than in July. This means that the proportion of firms wanting to raise prices is 47.5 percentage points higher than the proportion of firms wanting to lower prices. The figures are currently particularly high in the retail sector and remain the lowest in the main construction sectors. According to Ifo, higher inflation rates are possible in the coming months.
“So far, energy suppliers have only passed on to consumers a small fraction of the steep rise in stock exchange prices for electricity and natural gas. <…> This should change in the coming months and lead to double-digit inflation rates. Consumers will thus limit their consumption and the overall output will fall in the second half of the year,” said Ifo economics director Timo Wallmershäuser.
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