Dusseldorf The Ifo business climate index, which is considered the most important leading indicator for economic development in Germany, fell to 91.7 points in May. In the previous month it was still 93.4 points. It’s the first drop after six consecutive increases.
Ifo boss Clemens Fuest sees “a certain weakness on the demand side”. The reasons for this are the rising interest rates and the reduction in real incomes due to high inflation. However, in the debate about the accusation that companies are unjustifiably raising prices, Fuest says: “I think the term ‘greed inflation’ is nonsense.” Companies would always raise their prices if they could. Employees did the same with their salaries. “That’s how it is in the market economy, and competition keeps it in check,” says Fuest in the podcast.
With a view to the heating dispute within the traffic light coalition, Fuest advocates postponing the introduction of the new building energy law: “It doesn’t hurt if you sit down again and try to get even more people on board with a few compromises.”
Also: Handelsblatt editor Carsten Herz presents the most important results of Postbank’s housing atlas. The study provides information on how real estate prices could develop up to 2035.
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