BERLIN (Reuters) – German wholesale prices fell for the second time in a row in May due to cheaper energy.
They fell by 2.6 percent compared to the same month last year, as the Federal Statistical Office announced on Wednesday. This is the strongest decline since July 2020, when the outbreak of the corona pandemic also caused economic turmoil. In April there was already a minus of 0.5 percent – this was the first price decrease compared to the same month last year since December 2020. From April to May wholesale prices also fell by 1.1 percent.
With the falling price pressure in wholesale, inflation in Germany could also ease further. Because wholesalers act as a link between manufacturers and end customers, price changes usually reach consumers with a delay. The inflation rate in May was 6.1 percent, its lowest level in more than a year.
Petroleum products such as gasoline had the greatest influence on the development of wholesale prices last month, which rose particularly sharply a year ago after the Russian invasion of Ukraine. This time they were 22.7 percent cheaper than a year earlier. Waste material and residues (-31.3 percent), grain, raw tobacco, seeds and animal feed (-27.9 percent), ores, metals and semi-finished metal products (-22.1 percent) and chemical products (-9.4 percent) were also cheaper ). On the other hand, the prices for fruit, vegetables and potatoes (+22.5 percent), building materials and components made of mineral materials (+11.6 percent) and for live animals (+16.9 percent) rose.
Many economists now believe that inflation has peaked. “However, due to the high inflation at the beginning of the year, inflation in 2023 as a whole is likely to be more than five percent,” said Sebastian Dullien, Scientific Director of the Institute for Macroeconomics and Business Cycle Research (IMK). An inflation rate of less than 2.5 percent is expected for 2024.
(Report by Rene Wagner. Edited by Christian Götz. If you have any questions, please contact our editorial team at [email protected])