The energy crisis shot German producer prices to unprecedented heights

The German Federal Statistical Office, Destatis, announced on Friday that producer prices in July were 37.2 percent higher than a year earlier. An annual increase of 32.7 percent in June, 33.6 percent in May, 33.5 percent in April, 30.9 percent in March, 25.9 percent in February, and 25 percent in January was recorded. The monthly price increase in July was 5.3 percent, following the 0.6 percent increase in June.

Analysts expected a more modest annual producer price increase of 32 percent and the same 0.6 percent monthly producer price increase for July. In July, energy prices increased by 105 percent year-on-year and by 14.7 percent month-on-month. Within the annual increase, the price of natural gas in the distribution network rose by 163.8 percent, and that of electricity by 125.4 percent.

Last year, the average producer price increase in Germany was 10.5 percent, after a 1 percent decrease was recorded in 2020 compared to 2019. Last year, energy prices increased by an average of 24.8 percent after a 4 percent decrease the previous year, the price of natural gas rose by 41.7 percent, while the price of electricity rose by 25.1 percent in 2021.