Berlin September 8 : Berlin, Sep 8 : ifo Institute for Economic Research announced that expectations for prices in the next few months in Germany were 47.5 points in August, which is down from 47.6 points in July, which suggests that “the German companies want to raise their prices on an enormous scale”.If all the companies that were surveyed were planning to raise their prices and the balance adjusted for seasonality would be a hundred points higher, Xinhua news agency reported.
Food, on the other hand, saw the index stood at 96.8 points in August.This was down from 99.4 points in July.High wholesale prices have a negative impact on the entire food industry, and bakeries and restaurants in particular are also burdened by the rising electricity and gas costs.
“Unfortunately the end of the raging wave of inflation isn’t in the near future,” Timo Wollmershaeuser, director of forecasts for ifo warned.”So so far, energy providers have been the main beneficiaries of the sharp rises in the market prices for natural gas and electricity and have passed on only a small portion of the cost to their customers.”
After dropping for two months and then rising again for two months, inflation in Europe’s biggest economy reached an all-time high of 7.9 percent in August according to preliminary figures published by the Federal Statistical Office (Destatis).Food prices increased almost twice as fast than overall inflation.
As utilities begin to transfer the steep cost to clients, Wollmershaeuser expects to see “double-digit inflation rates” in the coming months.This will lead Germany to “curtail their consumption” and cause the overall economy to “contract in the second half of the year.”
More than 90 percent of German businesses see the current price levels of raw materials and energy as an “strong or a significant threat,” according to a survey of companies released by the Federation of German Industries (BDI) on Wednesday.When the survey was conducted in February, this percentage was four times lower.
“Our study shows that the increasing energy costs present industry with fundamental challenges,” BDI President Siegfried Russwurm told reporters, urging policymakers to “take action now to avoid insolvencies and create more social and economic unrest.”
Since the beginning of the conflict between Russia and Ukraine the price of energy has increased significantly and are continuing to exert an “substantial effect on inflation rate” Destatis noted.As Europe is getting ready for winter and the colder months, the one-month TTF (Title Transfer Facility) prices for gas are four times higher than the same time last year.
int/shs
