Although the development has slowed down somewhat, the IFO Institute still counts four sectors among the inflation winners. Some companies can increase their profits significantly by selling at exorbitant prices. Economist Ragnitz reveals what helps against the price increases.
According to the IFO Institute, some companies in Germany also increased their sales prices more sharply at the end of last year than the development in purchase prices suggested. "These companies have used the situation to increase their profits significantly," explained Joachim Ragnitz, deputy head of the IFO branch in Dresden. This applies above all to companies in retail, hospitality and transport as well as in the construction industry.
In agriculture and forestry, on the other hand, the increasing costs have recently had an increased impact. The industry was one of the inflation winners in the summer. Overall, development slowed down in the fourth quarter of 2022. "There is hope for consumers that inflation has peaked," Ragnitz continued.
According to the IFO, gross operating surpluses, i.e. corporate profits plus depreciation and other net taxes on production, rose sharply in almost all major sectors of the economy. "Even if the rate remains high, the momentum of price increases has weakened somewhat compared to the third quarter."
Only competition helps against exaggerated price increases, as the economist went on to say. The government could help bring down inflation by forgoing broad-based relief in favor of all households and restricting it to particularly poor households. On the other hand, if the trade unions were to prevail with their high wage demands, there would be a risk of a renewed surge in inflation, Ragnitz warned.
