Biggest drop in import prices in 36 years in Germany

Import prices in Germany registered the steepest year-on-year drop in July since January 1987.

According to data from the German Federal Statistical Office (Destatis), the country’s import price index fell 13.2 percent in July compared to the same month a year earlier, the steepest drop since January 1987. .

After falling 9.1 percent and 11.4 percent annually in May and June respectively, the market expectation was that import prices into the country would remain stable in July.

The index fell 0.6 percent monthly. The fall in the prices of energy products affected the fall in the prices of imports.

‘BASE EFFECT DUE TO WAR’

“As in previous months, the main driver of the current decline is mainly the base effect, which stems from the high price increases experienced the previous year due to the war in Ukraine,” Destatis said in a statement.

Power import prices were 47.4 percent cheaper in July compared to the same period last year.

Electricity costs fell 75.4 percent from a year ago, and imported coal and crude oil prices fell 63.7 and 33 percent, respectively. Import prices excluding energy products also declined 3.1 percent on-year.

Prices of imported consumer goods rose 1.2 percent. It should be noted that the prices of food products increased 3.9 percent annually in July, while meat and meat products increased 5.6 percent and fruit and vegetable products 8.8 percent.

DELAYED AFFECTS CONSUMER PRICES

Meanwhile, the export price index in Germany decreased 3.2 percent in July compared to the same period a year earlier and 0.3 percent compared to the previous month. Thus, the sharpest drop in the index since September 2009 was recorded.

Analysts predict that falling import costs will also affect consumer prices.

Since the German economy purchases many primary products and raw materials from abroad, the fall in import prices affects consumer prices with a lag. (AA)