German producer prices see sharpest year-on-year drop on record

Producer prices in Germany fell 14.7 per cent year-on-year in September, marking the sharpest drop since the start of data collection in 1949, the Federal Statistical Office (Destatis) said on October 20.

After a surge in energy prices triggered last year by the Russia-Ukraine conflict, electricity prices declined by 46.2 per cent year-on-year in September, Xinhua reports citing Destatis.

Food prices, on the other hand, continued to increase, with producer prices up 5.5 per cent year-on-year. According to Destatis, the price of sugar increased the most, more than 80 per cent.

Consumer price inflation, for which producer prices are an early indicator, already slowed to 4.5 per cent in September. However, inflation in Europe's largest economy "remains high," Destatis President Ruth Brand said in a statement.

According to a recent YouGov study conducted on behalf of Postbank, one in six people in Germany can barely cover their everyday expenses due to high inflation. More than one in three respondents said they had to draw on their savings.

"The chances of a recovery in consumer sentiment this year have probably fallen to zero," Rolf Buerkl of the market research institute GfK said in late September. "Private consumption will not be able to positively contribute to overall economic development this year."