IFO Nugget: Disinflation, lay-offs and weak orders/inventory ratios
The IFO details (released T+2 of the headline survey) revealed that overall price plans/expectations of companies now move sideways. The price survey is back in “normal territory” after the bizarre spike in 2022 and the survey remains consistent with a return to 2% inflation this year.
The issue is just if inflation starts rebounding from levels around or just below 2%, which is clearly not a scenario we can rule out for now, given that price trends move sideways at high levels within the normalized range.
Chart 1: Price plans suggest that 2% can be reached, but we are not going much below
The IFO Survey from Germany was a mixed bag of goodies but it emphasizes the trends seen lately. Germany is likely in a disinflationary recession already.
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