The Ifo price‑expectation indicator rose sharply in March, reaching 25.3 points compared with 20.3 points in February – the highest level since March 2023. Klaus Wohlrabe, head of the Ifo survey, said that “price pressure in Germany is rising again” and warned that the high energy prices are likely to lift inflation in the coming months.
He linked the recent upswing in expectations to the steep rise in crude oil, gas and electricity prices brought on by the war in the Middle East. After the energy component had previously dampened inflation, a reversal is now evident. “Companies are increasingly passing higher costs on” Wohlrabe added. “Higher production and transport costs will push energy prices through to goods and services”.
The increase was particularly pronounced in certain sectors. In industry, the index jumped from 13 to 20 points. Construction firms saw a rise from 10 to 20.2 points. Consumption‑related service providers pushed up their expectations from 25.1 to 31.6 points. Company‑related service providers, including wholesale, also showed a higher willingness to raise prices, with the indicator moving from 24.7 to 27 points. These results indicate that price pressure is growing across many sectors.
In the Ifo calculation, the points represent the net proportion of firms that intend to raise prices, subtracting those planning a cut. A balance of +100 points would mean all surveyed firms want to increase prices, while -100 would mean all want to cut them. The figures are seasonally adjusted, and the survey does not ask for the size of the planned price change.
