German import prices fell more sharply in August than they have in 37 years. This is primarily due to a base effect: after the start of the Ukraine war, prices rose sharply.
The sharpest decline in the prices of goods imported into Germany in almost 37 years indicates a further easing in inflation. Imports fell by an average of 16.4 percent in August compared to the same month last year, as the Federal Statistical Office announced today. That is the biggest loss since November 1986.
“As in previous months, the decisive factor for the current decline is primarily a base effect due to the high price increases in the previous year due to the war in Ukraine,” it said. Imports had already become noticeably cheaper in July (-13.2 percent) and June (-11.4 percent). From July to August, however, prices rose again for the first time by 0.4 percent, after having fallen consistently since September 2022.
Import prices also influence the Consumer prices
Last year, import prices rose by more than 30 percent at times. The decisive factor was the Russian attack on Ukraine, which made energy and raw materials significantly more expensive.
Since the German economy sources many intermediate products and raw materials from abroad, falling import prices are also reflected in general inflation with a delay. In September, consumer prices rose by 4.5 percent compared to the same month last year, the slowest rate since the start of the war in February 2022.
Here too, there was a particular statistical effect caused by the expiry of the 9 euro ticket in the same month last year. In September last year, tickets rose sharply in price. In September 2023, thanks to the Germany ticket introduced in May, they were significantly cheaper again than in the same month of the previous year.
Decline without energy was only 3.4 percent
Energy imports in August were 54.0 percent cheaper than a year earlier. One reason for this is falling prices for imported natural gas, which cost 73.4 percent less than in 2022. Electricity (-79.9 percent), hard coal (-61.4 percent), mineral oil products (-19.3 percent) and also were significantly cheaper Petroleum (-23.0). Many of these goods were in short supply a year earlier due to the war and had therefore become noticeably more expensive.
Prices for imported consumer goods, on the other hand, rose by 0.5 percent. You also had to pay more for food from abroad: here the surcharge was 2.2 percent. The prices for fruit and vegetable products (+7.1 percent), beverages (+6.5 percent) and for meat and meat products (+2.5 percent) rose particularly sharply. In contrast, milk and milk products were 14.0 percent cheaper than a year ago.
How strong the influence of the energy component is is shown by the fact that import prices without energy fell by only 3.4 percent compared to the previous year – significantly less than with energy. Compared to July 2023, they fell by 0.3 percent.