German companies experienced a decline in price expectations in March, hitting a three-year low, according to the Institute for Economic Research (Ifo), cited by Reuters. The institute also projected that inflation is likely to drop below the target set by the European Central Bank (ECB) in the upcoming months.
Inflation in Germany is on a downward trend and is expected to fall below the ECB’s target in the coming months.
“From a German perspective, there’s no reason why the ECB shouldn’t cut interest rates soon,” said Timo Wollmershaeuser, Ifo’s head of forecasts.
In February, German inflation eased to 2.7 per cent, a significant decrease from the double-digit highs seen during the energy crisis caused by Russia’s invasion of Ukraine.
A growing number of ECB policymakers are advocating for rate reductions. A meeting in June is being viewed as the most likely time for action, although a meeting is also scheduled for this month.
