German wholesale prices drop sharply in May

GERMANY’S wholesale prices decreased by 2.6 per cent on the year in May, the sharpest drop in nearly three years, according to data released on Wednesday (Jun 14), in a sign that inflation in Europe’s largest economy will continue to ease.

May’s year-on-year decrease was the strongest since July 2020, when the outbreak of the coronavirus pandemic led to economic distortions, the federal statistics office said.

Compared with the previous month, wholesale prices were down 1.1 per cent, the office said.

As wholesale price pressures fall, inflation in Germany could also continue to ease: Wholesalers are the link between manufacturers and end customers, and price changes usually reach consumers with a delay.

German inflation, harmonised to compare with other European Union countries, eased to its lowest level in more than a year in May, with consumer prices rising by a less-than-anticipated 6.3 per cent on the year. That marked the lowest point in inflation since March 2022, in the aftermath of Russia’s invasion of Ukraine.

The annual decrease in May wholesale prices was mainly due to falling prices for mineral oil products, which were down 22.7 per cent compared with a year earlier. REUTERS