Germany: producer prices fall. Inflation is passing its peak
As expected, the wave of energy inflation has reached its peak and is now heading towards containment even in countries that are highly dependent, from the energy point of view, from abroad, such as Germany. Annual producer price inflation in Germany fell to 34.5% in October 2022 from a record high of 45.8% in September and August , less than market expectations of 41.5%, indicating the lowest level since June. Energy prices remained the main driver of the increase (85.6% compared to 132.2% in September), in particular the distribution of natural gas (125.6%) and electricity (90.3%) . Excluding energy, producer prices increased by 13.7% compared to a year earlier. Other significant increases were recorded for intermediate goods (15.9%), in particular metals (21.0%) and basic chemical products, fertilizers and nitrogenous compounds (32.8%); non-durable consumer goods (19.0%), such as food products (25.1%); durable consumer goods (11.3%); and capital goods (7.8%), mainly driven by machinery (9.5%) and vehicles (5.6%). On a monthly basis, producer prices unexpectedly fell by 4.2%, missing the consensus for a 0.9% increase and fluctuating from September's 2.3% increase. Here is the related graph
This is something to be expected and which we will soon see also transmitted to consumer inflation, and due to the combination of two factors:
- the inflationary wave of energy and raw material prices ends. Inflation is the movement of prices, which cannot grow at high rates forever. this does not mean that prices do not remain high, however, but only that they do not grow faster;
- high prices slow down economic growth and lay the foundations for a decrease in demand and therefore for containing prices;
And the ECB? It just added side effects to a cure that was already there.
Thanks to our Telegram channel you can stay updated on the publication of new articles from Economic Scenarios.
The article Germany: producer prices fall. Inflation is passing its peak comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/germania-calano-i-prezzi-alla-produzione-linflazione-sta-superando-il-picco/ on Mon, 21 Nov 2022 11:27:09 +0000.