Wholesale prices fell again in March – the twelfth price decline in a row. This is good news for consumers because the numbers point to falling inflation.
German wholesale prices fell for the twelfth month in a row in March. They fell by an average of 3.0 percent compared to the same month last year, as the Federal Statistical Office announced this morning. There had already been a decline of this magnitude in February; in January the decline was 2.7 percent.
Economists regularly use developments in wholesale trade as an indicator to predict price increases for end consumers. Wholesale represents the link between manufacturers and end customers; Price reductions usually arrive with a delay and at least some of them reach consumers.
A downer, however, is the increase in wholesale prices compared to the previous month: in March, wholesale prices increased by 0.2 percent compared to February. Petroleum products even rose by 0.7 percent compared to the previous month.
Gasoline and grain prices fell
Mineral oil products such as gasoline and heating oil have the greatest influence on the overall development of wholesale prices. Compared to the same month last year, they fell by 3.3 percent in March.
Prices in the wholesale trade for grain, raw tobacco, seeds and animal feed (-19.8 percent), for ores, metals and semi-finished metal products (-13.6 percent), and for chemical products (-13.1 percent) were also cheaper compared to the previous year. as well as with old material and residues (-6.4 percent).
In contrast, many foods and beverages became more expensive. Wholesale prices for tobacco products rose (+5.8 percent). Significantly more had to be paid at the wholesale level in March for fruit, vegetables and potatoes (+4.4 percent) as well as for drinks (+4.2 percent) than a year ago.
Experts expect falling inflation rates
In March, the inflation rate fell to 2.2 percent, its lowest level in almost three years. Economists expect inflation to ease significantly this year and move closer to the European Central Bank’s (ECB) two percent target.
In their joint forecast for the federal government, the leading economic research institutes expect that the inflation rate this year will be an average of 2.3 percent. 1.8 percent is expected for 2025. For comparison: Last year consumer prices rose by 5.9 percent.