Germany’s December PPI slows to lowest level in more than a year

Germany’s Producer Price Index (PPI) has fallen to its lowest level in over a year, according to the Federal Statistical Office (Destatis). The PPI dropped by half from its peak, indicating that price pressures in the country are waning.

According to Destatis, the PPI rose 21.6% in December, a slower year-on-year increase compared to 28.2% in November 2022. This marks the lowest level since May 2021. The figure is also far from the record high of 45.8% in August and September.

The PPI index also fell 0.4% month-on-month, which was less than analysts expected. This marks the third consecutive month of declines as energy prices dropped. The fall in PPI has eased pressure on the sector and reinforced the belief that inflation will slow down in the coming months.

Energy prices were the main driver of the PPI, which was up 41.9% year-on-year. However, they fell 1% in the November-December period, mainly due to a 2.2% drop in natural gas prices. On average, in 2022, the PPI for commercial products was up 32.9% compared to 2021, the highest average annual change since the survey began in 1949.

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