German Producer Inflation Hits 3-Year High

Producer prices in Germany increased 2.2% year-on-year in May 2026, after a 1.7% rise in April, marking the second straight month of inflation. It was the fastest increase in producer prices since May 2023, though below market forecasts of 2.5%, mainly driven by higher prices for intermediate goods (4.2%) and energy (2.5%), with a sharp rise in mineral oil prices (34.9%) due to the Middle East conflict. Prices also rose for capital goods (2.0%), boosted by higher machinery costs, as well as motor vehicles, trailers, and semi-trailers, while durable consumer goods advanced 2.0%. By contrast, prices for non-durables dropped 1.7%, mainly due to cheaper food, particularly butter and pork. Excluding energy, producer prices rose 2.3%. On a monthly basis, producer prices rose 0.3%, slowing sharply from a 1.2% gain in April and falling short of expectations for a 0.7% increase, marking the softest monthly increase since February, when producer prices fell.

Producer prices in Germany rose 1.7% year-on-year in April 2026, recovering from a 0.2% decline in March and marking the first increase since February last year. The reading came in above market forecasts of 1.5% and represented the highest producer inflation since May 2023, mainly driven by higher intermediate goods prices (2.6%) and energy (2.0%), with a sharp rise in mineral oil prices (35.5%) due to the ongoing Middle East conflict. Prices also rose for capital goods (2.0%), boosted by higher machinery costs, as well as motor vehicles, trailers, and semi-trailers, while durable consumer goods climbed 1.9%. By contrast, prices for non-durables fell 1.0%, mainly due to cheaper food, particularly butter and pork. Excluding energy, producer prices rose 1.6%. On a monthly basis, producer prices climbed 1.2%, easing from a 2.5% rise in March, which was the largest increase since August 2022 but above the expected 1.0% gain, marking the second straight month of increase.

Producer prices in Germany fell 0.2% year-on-year in March 2026, easing from a 3.3% decline in February and marking the mildest drop since the current declining trend began in March last year. The softer annual decline came as energy prices fell at a slower pace (-3.2%), with lower natural gas and electricity costs partly offset by sharp increases in mineral oil products, reflecting the impact of tensions in the Middle East. Prices of non-durable consumer goods also declined (-0.3%), mainly due to cheaper food, particularly butter and pork. Meanwhile, prices for capital goods (1.9%) and durable consumer goods (1.9%) continued to rise, alongside intermediate goods (1.5%) primarily due to higher costs of metals and wood products. Excluding energy, producer prices rose 1.3%. On a monthly basis, producer prices jumped 2.5%, the largest increase since August 2022 and well above the expected 1.4% rise, driven primarily by a surge in energy costs (7.5%).