Consumers will have to adjust to higher food prices in the coming months. This is the result of surveys by the Ifo Institute. Some supermarkets are already raising prices.
Groceries are expected to become significantly more expensive in Germany. “According to our surveys, more than two-thirds of food manufacturers are planning further price increases in the coming months,” said Timo Wollmershäuser, head of economic activity at the Munich Ifo Institute, in the “Welt am Sonntag”. That’s more than ever before in reunified Germany. “Thus, food prices are likely to be a key inflation driver this year.”
The economic researchers have therefore upgraded their forecast for the inflation rate in Germany in 2022 to four percent. According to the report, the institute even expects food prices to increase by seven percent compared to the previous year.
Producer costs have risen sharply
The background to this is, among other things, sharply rising costs for producers. As the newspaper reported, citing calculations by the German Farmers’ Association (DBV), the jumps in the prices of fertilizers and fuel alone are causing production costs in arable farming to rise by 20 to 30 percent. Not every farm can or wants to go along with this.
Ultimately, consumers would feel this. “The price increase in the supermarkets is only just beginning,” said the partner at the consulting company EY and agribusiness officer Christian Janze of the newspaper. “Producer prices are rising sharply, which ultimately has an impact on consumer prices, especially following the next harvest.” A “price shock” is imminent.
