German producer prices rise less than expected in November

GERMANY’S producer price index eased in November for the second month in a row, adding to signs that high inflation could be waning in Europe’s largest economy as the cost of natural gas and electricity fell, according to data released on Tuesday (Dec 20).

Producer prices of industrial products rose 28.2 per cent on the same month last year compared with a 34.5 per cent year-on-year rise in October, the Federal Statistical Office reported. Analysts had forecast a November reading of 30.6 per cent.

Compared with October 2022, prices fell 3.9 per cent, which was below consensus for a drop of 2.5 per cent.

Energy prices were down 9.6 per cent on the previous month, driven mainly by easing costs for natural gas and electricity.

The office offers more detailed data on its website.

“The upward momentum for other goods also appears to be slowing,” said Ralph Solveen, head of economic research at Commerzbank.

“Consequently, there is hope that the underlying upward pressure on consumer prices will also weaken soon,” he said, while adding that inflation was likely to remain above 2 per cent in the medium term.

The European Central Bank sees inflation in the 19-country eurozone above its 2 per cent target through 2025.

Inflation in Germany is expected to reach 7.2 per cent in 2023 before easing to 4.1 per cent in 2024, according to the Bundesbank’s latest projections. REUTERS