Berlin German producer prices rose only minimally in June due to cheaper energy. Producers of commercial products – from milk to cars – demanded an average of just 0.1 percent more than a year earlier. This is the smallest increase since December 2020, as the Federal Statistical Office announced on Thursday.
Economists surveyed by the Reuters news agency had expected stagnation after the plus in May was 1.0 percent. Producer prices fell by 0.3 percent from May to June.
“The price relaxation at turbo speed continues at the upstream stages,” said the chief economist at Hauck Aufhäuser Lampe Privatbank AG, Alexander Krüger. “Inflationary pressure will continue to fall in the coming months.” If it eases at producer level, sooner or later consumers will too. The inflation rate is currently 6.4 percent.
The increase in producer prices was dampened by energy, which cost 5.0 percent less in June than in the same month last year. Shortly after the start of the Russian attack on Ukraine in February 2022, the prices had risen massively, but prices have fallen by more than a third since last September. Electricity was 12.4 percent cheaper and petroleum products even 21.1 percent cheaper.
Food, on the other hand, cost 11.1 percent more. “The prices for sugar rose particularly sharply,” according to the statistical office. There was a premium of 91.2 percent. Processed potatoes (+35.9 percent) and pork (+31.1 percent) also became noticeably more expensive.
19.8 percent more had to be paid for fruit and vegetable products, and 15.5 percent more for liquid milk and cream. Butter, on the other hand, cost 29.3 percent less, and the prices for untreated vegetable oils even fell by 44.0 percent.
Producer prices for capital goods, which include vehicles and machines, have risen: they are 6.3 percent more expensive than in June 2022. 7.8 percent more was asked for machines, and 5.8 percent more for motor vehicles and motor vehicle parts.
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