Germany’s inflation forecast for this year is raised to 4% amid high energy prices, a Munich-based research institution said on Monday.

The previous inflation forecast for 2022 made last December was 3.3%.

“Companies are passing the increased cost of energy and of procuring intermediate products and merchandise on to their customers. Those increases will filter down to consumer prices,” Timo Wollmershauser, head of forecasts at the Ifo Institute for Economic Research, said in a statement.

German companies’ price expectations for the next three months rose to a new high of 46 points in January, according to a recent survey by Ifo Institute.

The index stood at 44.7 points in December and at 45 points in November.

It came highest in wholesale at 60.3 points, followed by retail with 57.7 points and manufacturing at 55.6 points.

In the service sector, the index reached a new high of 41.9 points, and it came at 41.5 points in construction, the Ifo Institute said.

Annual consumer prices in Germany increased by 3.1% in 2021 compared to the year before.

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