Editor in chief at IamExpat Media
Commercial product prices in Germany rose quicker than ever before in January 2022, according to new figures from the Federal Statistical Office (Destatis). The figures give an indication of how consumer prices might develop in the coming months.
Faced with ever-increasing costs for energy like natural gas, electricity and oil, German manufacturers raised their prices more than ever before in January. According to Destatis, producer prices for commercial products rose by an average of 25 percent in the first month of 2022, compared to January 2021.
“This was the highest year-on-year increase since records began in 1949,” Destatis wrote. “Compared to the previous month, commercial producer prices rose by 2,2 percent.” The statisticians said that the rising price of energy continues to be primarily responsible for the increase in commercial producer prices.
In January 2022, energy prices were on average 66,7 percent higher than in the same month in 2021. The price of natural gas rose particularly sharply, at an annual rate of 119 percent. Excluding energy, producer prices were an average of 12 percent higher than in 2021.
The trend suggests what could be in store for consumers in the coming months, since producer prices are considered an indicator of the development of inflation. Producer prices are given for wholesale products and raw materials, before they are further processed or sold, and so can therefore give an early indication of the future development of consumer prices.
“It can be assumed that retailers will pass on at least part of this [price increase] to end consumers,” said Jens-Oliver Niklasch, an economist at LBBW, to Der Spiegel. “The question is how big this part will be.”
The Ifo Institute, based in Munich, announced earlier this year that it expected average inflation in Germany to hit 4 percent in the current year. If this happens, it will be the highest rate seen in the federal republic since 1993.