Germany’s producer prices fall 1.2% in May, driven by lower energy costs

Germany’s producer prices dropped 1.2% year-on-year in May, in line with market expectations, largely due to falling energy prices, official data showed Friday.

Producer prices in Germany declined by 1.2% in May compared to the same month last year, matching forecasts and marking a steeper drop than the 0.9% annual decline seen in April, according to data from the Federal Statistical Office (Destatis).

The decrease was primarily driven by a 6.7% year-on-year fall in energy prices. When excluding energy, producer prices actually rose by 1.3% annually.

Prices for intermediate goods also eased slightly, falling by 0.2% from a year earlier. In contrast, other categories saw price increases: capital goods were up 1.9%, non-durable consumer goods rose 3.6%, and durable consumer goods climbed 1.6%.

On a monthly basis, producer prices slipped by 0.2% in May, following a 0.6% decline in April. Analysts had expected a slightly sharper 0.3% monthly drop.

The data underscores continued disinflationary pressure in Germany’s industrial sector, despite persistent cost increases in consumer goods.

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