The prices of German producers have dropped for the first time since 2020

In July, producer prices in Germany experienced their first drop in nearly two and a half years, according to data released by the Federal Statistical Office. Commercial producers – spanning from dairy to automobiles – requested an average decrease of 6% compared to the previous year.

The last recorded price decrease, as per this information, was in November 2020.

Producers in Germany have experienced a decrease for the first time since 2020

The prices of German producers have witnessed a decline for the first time since 2020

The reasons behind this are attributed to a decrease in energy prices.

The reduction in producer prices, according to the information, is primarily attributed to the decrease in energy costs. The cost of energy had significantly risen following the onset of the Russian attack on Ukraine in February 2022.

Electricity prices dropped by 30% in July compared to the previous year, while mineral oil products decreased by 16.6%. Light heating oil cost 37.5% less than the previous year, and fuel provisioning costs decreased by 11.3%.

The impact on consumer prices

The prices were recorded in the statistics “at the factory gate,” prior to the processing or arrival of products in the markets. This pertains to the products that were produced and sold in Germany within sectors like mining, manufacturing, energy, and water.

Their prices indicate an early-stage economic development. According to experts, the decrease in producer prices is likely to have at least a partial impact on the evolution of consumer prices, and they consider this an indicator of inflation.

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