German companies have taken advantage of the situation to boost their profits, Joachim Ragnitz, deputy director of the Dresden branch of the German Institute for Economic Research (Ifo), said on March 7, according to Handelsblatt.
In an interview, Ragnitz said German companies were raising prices faster than necessary due to inflation and rising costs.
“First of all, this applies to companies [сферы] commerce, restoration, transport and construction”he continued. He did not name specific companies that inflated prices more than necessary, but said that in the summer of 2022, the agriculture and forestry industry was among “inflation winners”but already in the fourth quarter of 2022, it was hit hard by price increases.
According to Ragnitz, despite the fact that inflation is still quite high, “price growth dynamics compared to the third quarter [2022 года] slightly reduced”. In this regard, he expressed the hope that “for the consumer, the inflation peak has been exceeded”.
According to the expert, only greater competition can help against inflated prices. From his point of view, the government should support only the most needy households, instead of reducing the burden on all households. “If the unions prevail with their demands for high wages, then there may be a danger of a new round of inflation.”Ragnitz summarized.
Recall that a significant increase in inflation in Germany began a few years ago during the coronavirus epidemic. Inflation intensified especially in 2022.
Unions consider government aid insufficient and demand higher wages. Business owners refuse to raise wages, citing inflation and rising costs.
Source: Rossa Primavera
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