1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites

Inflation in Germany has peaked, IFO researchers say

July 28, 2022

Inflation in Germany is likely to start dropping again over the rest of the year, according to a prestigious economic think tank. But researchers warn food prices may still rise.

Woman looking for products in a refrigerated shelf
Rising food prices in Germany seem to be there for the long termImage: Frank Hoermann/SVEN SIMON/picture alliance

Prices for consumer products in Germany are likely to sink again in the second half of 2022 after months of inflation, a leading economic research institute said on Thursday.

The number of companies intending to raise their prices over the next quarter has sunk for the third month running, said the ifo Institute, citing its latest survey.

"Prices may continue rising, but the tempo will slow. That means inflation has reached its highest point and will go down in the course of the second half of the year," said IFO's head of business cycle analysis and forecasts, Timo Wollmershäuser.

Official data from Germany's Federal Statistics Office on Thursday appeared to back up the IFO position. The predicted annual inflation rate  for July declined slightly for the second consecutive month, to 7.5%. It had already slipped from 7.9% in May to 7.6% in June.

What else did IFO say?

Wollmershäuser said that the price expectations of businesses tend to take a few months to be reflected in consumer prices.

The construction sector and industry had seen the clearest reduction in these expectations, he said.

However, prices in sectors that more directly affect consumers, such as hospitality, leisure, culture and entertainment, were also likely to climb more slowly, according to IFO.

The one big exception is the food retail sector, where there was no end to inflation in sight, the institute said, with all companies in the survey wanting to raise their prices.

Inflation in Germany reached 7.6% in July.

What is inflation?

tj/dj (AFP, Reuters)

While you're here: Every Tuesday, DW editors round up what is happening in German politics and society. You can sign up here for the weekly email newsletter Berlin Briefing.