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German Producer Prices Fall for Second Month as Energy Costs Drop

April's 0.9% annual decline in producer prices, driven by a 6.4% drop in energy costs, exceeds expectations but masks rising non-energy input costs.

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Overview

  • Producer prices in Germany fell by 0.9% year-on-year in April 2025, marking the second consecutive monthly decline, according to the Statistisches Bundesamt.
  • Energy prices dropped significantly, with electricity falling 7.5%, natural gas 6.2%, and heating oil 16.5% compared to April 2024.
  • Excluding energy, producer prices rose by 1.5% year-on-year, reflecting persistent price pressures in other sectors, including a 3.8% rise in food costs.
  • Food items saw sharp price increases, with coffee up 43.3%, beef 30.4%, butter 24.6%, and vegetable oils 15.8%.
  • Economists caution that while energy-driven declines have eased consumer inflation, broader price pressures suggest inflation risks remain for the European Central Bank's monetary policy considerations.