Ifo Survey: Companies' Price Expectations Decline Again in June

Price expectations also declined somewhat in the services and trade sectors as well as in manufacturing. In food retail, price pressure also eased – from 55.3 to 48.5 points – but remains high.

Food Manufacturers at the Center of the Easing

The Ifo index sets the share of companies that want to raise their prices in the coming months in relation to those that want to lower their prices. The Ifo does not ask how strongly prices are to be changed. According to the Munich-based economic researchers, a falling value means that fewer companies plan to raise their prices.

Despite the decline, the current level remains significantly elevated: price expectations are still well above the average of 18.3 points for the years 2023 to 2025. The Ifo Institute sees signs of an easing in inflation.

Wollmershäuser Sees a Turn, but No Rapid Decline

Ifo chief economist Timo Wollmershäuser said: "Allerdings dürften die Produzenten- und Verbraucherpreise in den kommenden Monaten weiterhin steigen." At the same time, he pointed to factors that had eased the pressure: "Sinkende Energiepreise, zu denen die Hoffnungen auf Frieden im Nahen Osten zusätzlich beigetragen haben, scheinen die Unternehmen zuversichtlicher hinsichtlich der wirtschaftlichen Lage gemacht zu haben."

The overall picture, however, also includes the end of the fuel discount, which will make itself felt in July. "Sehe man vom Ende des Tankrabatts ab, der sich im Juli bemerkbar machen werde, spreche das dafür, dass die große Welle der Preiserhöhungen durch sei," Wollmershäuser continued. The peak of inflation may have been reached during the summer months.

Figures Remain Above the Long-Term Average

The Ifo indicator has remained clearly above its long-term average since the outbreak of the Iran war. The data series now signals a gradual easing, without price dynamics having yet returned to pre-crisis levels.