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German Import Prices Fall Most In Nearly 40 Years

RTTNews | 61 days ago
German Import Prices Fall Most In Nearly 40 Years

(RTTNews) - Germany's import prices declined at the fastest pace in almost four decades, mainly due to base effect from the surge in prices in the same month last year due to the war in Ukraine, the statistical office Destatis said Friday, adding to signs of easing price pressures in the biggest euro area economy. Import prices fell 16.4 percent year-on-year after a 13.2 percent slump in July. In June, prices decreased 11.4 percent. The latest decline was the biggest annual fall in import prices since November 1986, when they decreased 16.5 percent, Destatis said.

Compared to the previous month, import prices rose 0.4 percent in August, ending the series of monthly declines since September last year.

The latest year-on-year decline in import prices was mainly due to a 54 percent slump in prices of energy imports. However, they were 4.1 percent higher compared to the previous month. Within energy imports, natural gas had the biggest fall of 73.4 percent from last year. All other imported energy sources were also considerably less expensive than in the same month a year earlier, Destatis said. Excluding energy prices, import prices fell 3.4 percent year-on-year and 0.3 percent from the previous month. Prices of intermediate goods imports decreased 9.7 percent annually and those of agricultural imports were down 1.5 percent. Imported durable consumer goods prices decreased 0.3 percent year-on-year, while prices of capital goods rose 2.5 percent, led by motor vehicles, trailers and semi-trailers and for machinery.

Export prices dropped 5.1 percent year-on-year in August, but rose by 0.1 percent from the previous month. This was the largest year-on-year decline in export prices since the monthly index calculation began in 1962, Destatis said.

Inflationary pressures have eased in the biggest euro area economy, but remains high, prompting the European Central Bank to maintain a cautious stance. Preliminary figures released by Destatis on Thursday showed that consumer price inflation in Germany slowed to 4.5 percent in September, which was the lowest since the outbreak of the war in Ukraine. Core inflation softened to 4.6 percent from 5.5 percent in the previous month.

Data released on Friday showed that Euro area inflation weakened sharply to 4.3 percent in September, which was the lowest level since late 2021. Core inflation slowed to 4.5 percent.

The ECB has raised rates for ten policy sessions in a row and the key interest rate is now at a record level. Earlier this month, the bank raised the key interest rates, but ECB President Christine Lagarde signaled a pause ahead, which is in sync with the stance adopted by major peers such as the Fed and the Bank of England.

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