The decline in prices of goods imported into Germany accelerated further in August. Import prices fell by 16.4 percent compared to the same month last year, as the Federal Statistical Office announced on Friday in Wiesbaden. It is the largest decline since November 1986, i.e. in around 37 years. Last year, however, import prices rose by more than 30 percent at times. The decisive factor was the war in Ukraine, which made energy and raw materials significantly more expensive.
The statistics office explains the current price decline primarily with a so-called base effect because prices rose so sharply in the previous year. The effect is particularly effective on energy imports, which were 54 percent cheaper in August than a year ago. However, compared to July this year, imported energy was 4.1 percent more expensive.
How strong the influence of the energy component is is shown by the fact that import prices without energy fell by only 3.4 percent compared to the previous year – significantly less than with energy.
Import prices also influence consumer prices, which the European Central Bank (ECB) bases its monetary policy on. In the fight against high inflation, the ECB has raised its key interest rates sharply since summer 2022. Recently, however, the central bank had indicated that it was nearing the end of the tightening measures.