Record drop in producer prices in Germany

The German Federal Statistical Office (Destatis) announced the results of the Industrial Producer Price Index (IPP) for September.

Consequently, the PPI in the country decreased by 0.2 percent in September compared to the previous month and by 14.7 percent annually.

The Destatis statement stated that the September drop was the sharpest annual drop in producer prices since 1949, when the data began to be collected, and recalled that the main reason for this was the fall in farm prices. energy.

IT HAD INCREASED STRONGER THAN EVER

In the statement: “This evolution (decrease of 14.7 percent) is especially due to the base effect resulting from the very high price level of the previous year. “In August and September 2022, as a result of the war in Ukraine, producer prices rose more sharply than at any time since the start of the IPP survey.” It was said.

The expectation in the markets for the PPI, which had a small decrease of 12.6 percent in August, was for a decrease of 14.2 percent in September.

THE PRICES OF INTERMEDIATE GOODS DECREASED BY 4.2 PERCENT ANNUALLY

While prices of intermediate goods decreased annually in September, prices of consumer and capital goods increased.

On an annual basis, there was a 4.2 percent decrease in intermediate goods prices and a 35.3 percent decrease in energy prices. While it is noteworthy that food prices increased by 5.5 percent annually, sugar prices increased by 84.7 percent.

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

Annual inflation in Germany, which was 6.1 percent in August, fell to 4.5 percent in September, in line with expectations, to its lowest level since the Russia-Ukraine war. (AA)