German producer prices have continued to fall. Electricity and gas in particular are cheaper. This is good news for consumers: Falling producer prices indicate a decline in inflation.
Producer prices in Germany fell again in February. Manufacturers of commercial products – from gasoline to coffee – charged an average of 4.1 percent less than a year earlier, the Federal Statistical Office announced today. This was the eighth decline in a row. Some experts classify the decline as surprisingly significant: Economists surveyed by the Reuters news agency had only expected a decline of 3.8 percent, after a decline of 4.4 percent in January.
From January to February, prices also fell by 0.4 percent. Only a minus of 0.1 percent was expected here. For the first time in almost three years, food costs less than a year earlier: it fell by an average of 0.8 percent. Untreated vegetable oils were particularly cheaper (–19.4 percent). Milk prices fell by 11.8 percent and coffee prices by 9.7 percent. Confectionery rose in price by 12.9 percent and butter by 5.6 percent.
Electricity and gas are cheaper
“The main reason for the decline in producer prices compared to the same month last year was the decline in energy prices in February 2024,” emphasized the statisticians. This fell by 10.1 percent compared to February 2023. Electricity prices fell by 16.8 percent and gas prices by as much as 17.7 percent. Fuels such as gasoline also fell by 1.4 percent.
The development is good news for consumers: the prices for products are recorded in the statistics before they are further processed or go on sale. They therefore allow early conclusions to be drawn about the development of consumer prices. These only increased by 2.5 percent in February – that is the lowest inflation rate since June 2021.