German companies' price expectations fell in March to their lowest level in three years, with inflation set to fall below the European Central Bank's target in the coming months, the Ifo institute said on Tuesday.
"Inflation is still on the decline and should fall below 2% this summer. From a German perspective, there's no reason why the ECB shouldn't cut interest rates soon," Ifo head of forecasts Timo Wollmershaeuser said in a statement.
The institute's price expectations index declined from 15.0 points in February to 14.3 points in March, its lowest reading since March 2021.
German inflation eased to 2.7% in February, far from the double-digit highs reached during the energy crisis triggered by Russia's invasion of Ukraine.
A growing number of ECB policymakers have supported rate reductions, with a June meeting shaping up as the most likely time for action, although there is also a meeting scheduled for this month.
