According to data from the German Federal Statistical Office (Destatis), the Producer Price Index (PPI) in the country rose 0.3 percent in April compared to the previous month and 4.1 percent over a annual basis.

Thus, producer prices in Germany registered the lowest annual increase since April 2021.

Although the upward pressure on producer prices eased with the fall in energy prices, it was notable that it increased above analysts’ expectations in April.

The market expectation was that the PPI would rise 4 percent annually in April.

MONTHLY DECREASE TRANSFERRED TO THE 7TH MONTH

Notably, the annual PPI increase in this period was the lowest annual increase since April 2021. In April, the monthly decline in producer prices took the seventh consecutive month.

The prices of capital goods, including vehicles and machinery, were the most important reason for the annual increase in April. The prices of capital goods increased 6.8 percent with respect to the same period of the previous year.

On an annual basis, prices of intermediate goods rose 0.2 percent and consumer durables 8.8 percent.

It should be noted that food prices increased by 13.6% annually, while sugar prices increased by 88.9%. The price of vegetable oils also decreased by 35.7 percent annually.

In April, energy prices rose just 2.8 percent compared to the same period last year.

THE PPI INCREASED 4.8 PERCENT EXCLUDING ENERGY PRICES

Excluding energy prices, the PPI rose 4.8 percent on-year in April.

Producer prices are considered a leading indicator of the evolution of inflation. It affects consumer prices, on which the European Central Bank (ECB) bases its monetary policy. After wavering for a while in the face of high inflation, the ECB had raised policy rates significantly.

Annual inflation in Germany, which was 7.4 percent in March, fell to 7.2 percent in April, close to expectations, due to falling energy prices.

While most experts said inflation peaked in Germany, which has the largest economy in Europe, they emphasized that inflation is expected to stay high for now with food prices and will continue to reduce power. consumer purchasing.

Leading German economic research institutes predict that inflation, which was 6.9% on average in 2022, will decline to an average of 6% in 2023 and 2.4% in 2024.

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)