German wholesalers see inflation wiping out revenue jump this year

GERMANY’S wholesalers see their revenues rising by around 15 per cent this year but expect soaring inflation to wipe out the increase in real terms, the Federal Association of Wholesale, Foreign Trade and Services (BGA) forecast on Wednesday (Aug 31).

“In real terms, and this is the most important value, we expect the economy to slow down and thus tend towards zero, if not below,” said BGA President Dirk Jandura. “It is alarming when nominal and real sales diverge so much.”

German inflation rose to 8.8 per cent in August, its highest level in almost 50 years, beating a high set only 3 months earlier, data showed on Tuesday.

In addition, 4 out of 5 wholesalers surveyed by BGA said they were having difficulties with the supply of gas for electricity and heat generation, with 1 in 5 saying the impact was “massive”.

BGA’s comments add to an increasingly gloomy mood among German companies. Business morale in August fell to its lowest reading since June 2020 amid high uncertainty due to the Ukraine war, the resulting energy crisis and fears of an economic downturn in the third quarter. REUTERS