Germany: Producer prices fall for the first time since November 2020

(Patria) - Producer prices in Germany in July fell on an annual basis for the first time in more than two and a half years, pressured by falling energy prices, according to data from the German statistical office Destatis.

Producer prices in July fell by six percent compared to the same month a year earlier, when they had jumped as a consequence of the war in Ukraine, the statistical office announced on Monday.

This is the first annual drop in producer prices in Germany since November 2020 and the sharpest drop since October 2009, when the financial crisis was raging.

Energy prices in July plummeted by 19.3 percent compared to the same period last year, as electricity prices fell sharply, with electricity becoming 30 percent cheaper for all customer groups.

If energy prices are excluded, producer prices in July were two percent higher than in the same month last year.

Compared to June of this year, producer prices in Germany were 1.1 percent lower, according to Destatis data, reports SEEbiz.

Germany's producer price index, which measures changes in the prices of goods sold by producers, is considered a key indicator of inflation, which slowed to 6.5 percent in July in Europe's largest economy.

The easing of inflationary pressures in Germany and the entire eurozone followed a sharp increase in interest rates by the European Central Bank over the past year.

However, this has caused a slowdown in economic growth, as well as weakening demand, putting pressure on producer prices as well.