Producer inflation hits record in Germany
Producer inflation in Germany moved its record streak to the sixth month in May. PPI in the country increased by 33.6% last month compared to the same period of 2021, due to the effect of energy prices.
It was reported that German companies increased their prices, especially in energy, packaging and feed products, at a record pace in May, together with Russia’s Ukraine operation.
In Germany, the Producer Price Index (PPI) rose 33.6% last month compared to the same period in 2021, driven by rising post-war energy prices in the region.
The German Federal Statistical Office (Destatis) has announced the PPI data for May.
Accordingly, the PPI in Germany increased by 1.6 percent in May compared to April, and by 33.6% compared to May 2021. The market expectation was that the PPI would increase by 1.6 percent in May.
‘Recorded as the highest annual increase since 1949’
The increase in May was recorded as the highest annual increase since 1949, when PPI statistics began to be recorded. Thus, the record series in producer inflation since December 2021 continued in May as well.
Industry PPI had increased by 33.5 percent, 30.9 percent and 25.9 percent annually in April, March and February, respectively.
The main reason for the increase in producer prices compared to the previous year continues to be the price trend in energy products.
Natural gas distribution prices increased by 210.7 percent
According to the data, energy prices rose 87.1 percent in May compared to the same period of the previous year.
Electricity prices increased by 90.4 percent and natural gas distribution prices for industry increased by 210.7 percent.
In May, an annual increase of 25.1 percent in intermediate goods prices, 9.4 percent in durable consumer goods and 7.1 percent in capital goods prices was observed.
It is noteworthy that oil prices increased by 80.2 percent compared to the previous year, while meat prices increased by 42.9 percent and coffee prices by 33.6%.
Fertilizer prices were 110.9 percent more expensive compared to May of last year, while wooden packaging prices increased by 67.4 percent and feed prices by 48.7 percent in May.
Excluding energy prices, PPI rose 16.5 percent year-on-year in May. Producer prices are seen as a leading indicator for the development of inflation.
Meanwhile, annual inflation in Germany, which was 7.4 percent in April, rose to 7.9 percent in May due to rising fuel and food prices, reaching the highest rate since the winter of 1973-1974, when the first oil crisis took place.