Status: 07/20/2021 10:15 a.m.
Producer prices in Germany are rising as sharply as they were last during the second oil crisis in 1982. This indicates that consumers must expect sustained high inflation.
The inflation rate in Germany remains high. In June, producer prices rose by 8.5 percent compared to the same month last year, according to the Federal Statistical Office. That is the strongest increase since the second oil crisis in 1982. The prices that manufacturers receive or have to pay for goods rose by 1.3 percent compared with the previous month.
The main reason for the increase was the price development for intermediate goods and energy, explained the statistics office. Intermediate goods, i.e. intermediate products for production, rose by 12.7 percent over the year, while energy was 16.9 percent more expensive on average.
“The main reasons for the sharp rise in steel and wood prices are likely to be the high demand at home and abroad as well as problems in the supply of raw materials,” it said. In the case of energy, there is primarily a statistical base effect, since energy prices fell sharply in the first Corona wave in spring 2020.
Inflation in the US is already over 5 percent
The producer prices are considered to be a leading indicator for the development of inflation. In the statistics, the prices are kept ex factory, i.e. usually before the products are further processed or go on sale. You can use it to provide important information on how consumer prices will develop later.
Many economists are now of the opinion that part of the rise in producer prices will also reach consumers in the coming months. Germany and the world have seen rising inflation for a long time. In June it had risen by 2.3 percent in this country, in May with 2.5 percent even as strong as it has not been for nearly ten years. In the United States, it had climbed 5.4 percent in June.