OPINION
Market Rating Before FOMC MeetingJan 31
Producer Inflation in Germany Reaches the 47-Year Peak
According to Destatis data announced today, producer price index (PPI) grew by 2.3 percent in September compared to the previous month, and it exceeded the market forecast of 12.7 percent on annual basis and reached 14.2 percent.
Destatis reported that energy prices as a whole were up 32.6% compared to September 2020 and by 8.0 compared to August 2021. Mainly responsible for the high rise of energy prices was the strong increase regarding natural gas. Prices of intermediate goods increased by 17.4% compared to September 2020.
Rise of prices in energy sector is caused by rises in natural gas price and weak performance of euro in September and global bottlenecks led to cost pressures on intermediate goods, especially regarding wood, secondary raw materials and metals in Germany.
Although the German government is trying to use subsidies in order to ease the energy bills, international commodity prices are still high. Supply chain problems, especially in the transportation, signal that the upward pressure on producer inflation will continue for some time. It is also clear that these rises will highly affect the consumer prices.
Destatis reported that energy prices as a whole were up 32.6% compared to September 2020 and by 8.0 compared to August 2021. Mainly responsible for the high rise of energy prices was the strong increase regarding natural gas. Prices of intermediate goods increased by 17.4% compared to September 2020.
Rise of prices in energy sector is caused by rises in natural gas price and weak performance of euro in September and global bottlenecks led to cost pressures on intermediate goods, especially regarding wood, secondary raw materials and metals in Germany.
Although the German government is trying to use subsidies in order to ease the energy bills, international commodity prices are still high. Supply chain problems, especially in the transportation, signal that the upward pressure on producer inflation will continue for some time. It is also clear that these rises will highly affect the consumer prices.
