German producer inflation fell more than expected

Upward pressure on producer prices in Germany continued to weaken in November with falling energy prices.

According to data from the German Federal Statistical Office (Destatis), the Producer Price Index (PPI) in the country decreased by 3.9 percent in November compared to the previous month and increased by 28.2 percent annually. .

Analysts had forecast a 1.7 percent drop in November.

The first monthly decline in producer prices since May 2020 was observed in October 2022, while the monthly decline continued in November.

RECORD BREAKS IN AUGUST AND SEPTEMBER

The PPI increased 45.8 percent in August and September on an annual basis, the highest increase since 1949.

In November 2022, energy prices increased 65.8 percent compared to the same period last year. It should be noted that energy prices decreased by 9.6 percent compared to the previous month due to the decrease in the costs of natural gas and electricity.

Natural gas distribution prices rose 92.6 percent and electricity prices 74.9 percent annually in November.

On an annual basis, prices of intermediate goods rose 13.8 percent, consumer durables 11.1 percent, and capital goods prices 7.8 percent.

Notably, food prices increased 24.2 percent over the previous year, while oil prices increased 37.1 percent and sugar prices 54.8 percent.

PPI ENERGY PRICES RISE 12.7 PERCENT

Excluding energy prices, the PPI rose 12.7 percent on-year in November.

Producer prices are considered a leading indicator of the evolution of inflation.

Annual inflation in Germany, which in October this year was 10.4 percent, fell to 10 percent in November with the fall in energy prices, especially oil.

The German Central Bank (Bundesbank) expects inflation in the country to remain at 7.2 percent in 2023 before falling to 4.1 percent in 2024. (BRITISH AUTOMOBILE CLUB)