German Producer Prices Drop the Most in 13 Months

Producer prices in Germany fell by 1.5% year-on-year in July 2025, following a 1.3% decline in June and exceeding market expectations of a 1.3% drop.

This marked the fifth consecutive month of falling producer prices and the sharpest annual decline since June 2024.

The overall decrease was largely driven by lower energy costs, which fell 6.8%.

Within the energy sector, key contributors included natural gas (-8.6%), mineral oil products (-7.9%), electricity (-7.8%), heating oil (-5.7%), and motor fuel (-3.9%).

Additionally, prices for intermediate goods decreased by 0.9%.

Conversely, prices increased for non-durable consumer goods (3.5%), durable consumer goods (1.9%), and capital goods (1.8%).

Excluding energy, producer prices climbed by 1.0%, after a 1.3% rise in June.

On a monthly basis, the producer price index unexpectedly edged down 0.1% in July, reversing a 0.1% increase in June and missing forecasts of a 0.1% gain.