OPINION
Market Rating Before FOMC MeetingJan 31
Cost Pressure is still high in Germany
According to data released today by Destatis, Producer Price Index has increased by 4.9 percent on monthly basis and set a new record by hitting 30.9, above forecast of 28.2, on annual basis.
According to Destatis, energy prices as a whole were up 83.8% compared to March 2021 and by 10.4% compared to February 2022. Mainly responsible for the high rise of energy prices were the strong price increases of natural gas (distribution) which was +144.8% on March 2021.
Prices of non-durable consumer goods increased by 9.6% compared to March 2021 and rose by 2.9% compared to February 2022. Prices of intermediate goods increased by 23.3% compared to March 2021. According to Destatis, these results should already contain first implications deriving from Russia’s attack on Ukraine.
This recent data shows that high commodity prices, especially oil and natural gas, due to the Russian invasion of Ukraine lead to cost pressure on Germany. Although the consumer price index (CPI) announced at 7.3 reveals that the German manufacturers have not yet fully reflected their costs, the annual outlook of the relatively stable PPI signals that the effect will transfer to the CPI soon.
According to Destatis, energy prices as a whole were up 83.8% compared to March 2021 and by 10.4% compared to February 2022. Mainly responsible for the high rise of energy prices were the strong price increases of natural gas (distribution) which was +144.8% on March 2021.
Prices of non-durable consumer goods increased by 9.6% compared to March 2021 and rose by 2.9% compared to February 2022. Prices of intermediate goods increased by 23.3% compared to March 2021. According to Destatis, these results should already contain first implications deriving from Russia’s attack on Ukraine.
This recent data shows that high commodity prices, especially oil and natural gas, due to the Russian invasion of Ukraine lead to cost pressure on Germany. Although the consumer price index (CPI) announced at 7.3 reveals that the German manufacturers have not yet fully reflected their costs, the annual outlook of the relatively stable PPI signals that the effect will transfer to the CPI soon.
