First drop in wholesale prices in Germany in two years
According to data from Germany’s Federal Statistical Office (Destatis), the Wholesale Price Index in the country decreased by 0.5 percent in April compared to the same period last year, showing the first annual decline since December 2020.
“The fall in wholesale prices in April was the first since the 1.2 percent year-on-year decline in December 2020,” Destatis said in a statement.
Prices rose 2 percent in March and 8.9 percent in February.
The Wholesale Price Index decreased by 0.4 percent on a monthly basis in April.
The decline in the prices of petroleum products was effective in the decrease in prices. Petroleum products fell 15.7 percent and solid fuels 31.5 percent year-on-year in April. It was noteworthy that the increase in potato prices was 22 percent on an annual basis in April.
Expectation that inflation will remain high in food
Meanwhile, since wholesale is the link between the producer and the end consumer, this development serves as an indicator for future inflation trends.
On the other hand, annual inflation in Germany, which was 7.4 percent in March, fell to 7.2 percent in April, close to expectations, due to the fall in energy prices.
While most experts stated that inflation has peaked in Germany, which has the largest economy in Europe, they emphasized that inflation is expected to remain high for now with food prices and will continue to reduce the purchasing power of consumers.
Meanwhile, leading German economic research institutes predict that inflation, which averaged 6.9 percent in 2022, will decline to an average of 6 percent in 2023 and to 2.4 percent in 2024.