German Producer Prices Rise the Most Since 2008
Producer prices in Germany increased 7.2 percent year-on-year in May of 2021, the strongest growth since October of 2008, when prices rose strongly before the financial crisis, and above market expectations of 6.4 percent. Main upward pressure came from cost of intermediate products (10.7 percent), namely secondary raw material (69.9 percent), sawn and planed wood (38.4 percent) and metals (23.1 percent); and of energy (14.9 percent), namely natural gas (25.5 percent), after a sharp drop in prices in the spring 2020 when the coronavirus pandemic hit the economy hard. Prices of durable consumer goods increased by 1.7 percent and capital goods, such as machines and vehicles, by 1.2 percent. On the other hand, prices of non-durable consumer goods rose by 0.5 percent, with food increasing 0.3 percent, mainly due to vegetables oils and butter. On a monthly basis, producer prices advanced 1.5 percent, the most since July 2008, and beating market forecasts of a 0.7 percent rise.
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