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The level of inflation has reached its peak, notes the German analytical center of the economy


One of Germany’s largest and most prestigious economic think tanks, the Ifo Institute for Economic Research, said the inflation rate in the federal republic appears to have peaked and is likely to start falling by the end of the year – although some prices will continue to rise.

Could inflation in Germany fall?

After months of consistent growth, the inflation rate in Germany The Ifo Institute said on Thursday that it is likely to slow down in the coming months. Referring to its latest survey which showed that the number companies with the intention to raise prices fell for the third month in a row, the institute said that the rapid increase in consumer prices is likely to moderate or even decline in the second half of 2022.

“Prices may continue to rise, but the pace will slow,” Ifo chief economist Timo Volmershauser said. dpa. “This means that inflation has reached its highest point and will decrease in the second half of the year.” He added that the price expectations of businesses may affect consumer prices after some time.

Inflation will continue in the food retail sector

According to the Ifo Institute, the situation differs in different sectors of the economy: the most notable decline in price expectations was observed in the construction and industrial sectors. Prices in sectors that more directly affect consumers, such as leisure, culture, hospitality and entertainment, will continue to rise, the institute predicted, but at a slower pace.

However, the situation is different in food retail, where almost all companies are engaged in buying and selling food in Germany saying they plan to raise prices. The Ifo Institute said it sees no end to inflation in the food retail sector just yet.

This news added urgency to the call to The VAT rate will be reduced on some food products. Federal Association of Consumer Organizations President Ramona Popp told Funke Media Group that the decline taxes on certain types of food, such as fruits, vegetables and legumes, will deprive consumers and also make it easier for people to eat healthy.

Inflation in Germany eased slightly in July, according to the Federal Statistical Office, to 7.5% from 7.6% in June. It hit a 30-year high of 7.9 percent in May.

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