Germany's price expectations hit 2-year low in March 2024: ifo

03 Apr 24 1 min read

Insights

  • In March 2024, Germany's price expectations hit a two-year low, falling to 14.3 points, according to the ifo Institute.
  • The country's retail sector saw a decrease to 25.4 points, while the manufacturing sector slightly increased to 6.4 points in March 2024.
  • Consumer-related industries experienced the most significant decrease to 24.6 points.
Germany witnessed a significant shift in price expectations in March, reaching the lowest point since March 2021, according to the ifo Institute. The price expectations decreased to 14.3 points in March, down from 15.0 points in February.

Retail sector reported a cautious stance, with price expectations falling to 25.4 points from the previous 29.5 points. Contrastingly, the manufacturing sector showed a slight uptick in price expectations, rising to 6.4 points from 5.0 points.

This downward trend was most pronounced in consumer-related industries, where the intention to raise prices has notably diminished. The sector's price expectation index dropped to 24.6 points from 28.7 points.

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“Inflation is still on the decline and should fall below 2 per cent this summer. From a German perspective, there’s no reason why the ECB shouldn’t cut interest rates soon,” said Timo Wollmershauser, head of forecasts at ifo.

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