BERLIN (Reuters) -German producer prices decreased more than expected on the year in July, their first fall in over two-and-a-half years, as easing energy price pressures added to hopes that inflation in Europe’s largest economy could abate further.
July producer prices were down 6.0% compared with the same month last year, when producer prices soared as a consequence of the war in Ukraine, the federal statistics office said on Monday.
Analysts had expected a drop of 5.1% in a poll by Reuters.
It was the first year-on-year decline in producer prices since November 2020 and the sharpest decline since October 2009 during the financial crisis.
Energy prices sank 19.3% in July on the year, as electricity prices slumped: Across all customer groups, electricity prices fell by 30.0%.
With energy prices excluded, producer prices in July were 2.0% higher compared with the same month last year.
On the month, producer prices were down 1.1%. Analysts had expected a drop of 0.2%.
Germany’s producer price index, which measures the change in the price of goods sold by manufacturers, is considered a key indicator for inflation, which in July eased to 6.5%.
(Reporting by Miranda MurrayWriting by Rachel MoreEditing by Kirsti Knolle and Bernadette Baum)