German wholesale prices show a moderate decrease compared to recent patterns.
Prices in Germany's wholesale trade market are starting to stabilize. In April, prices dropped just 1.8% compared to last year, marking the twelfth consecutive decline but also the smallest one in the past ten months. In March, there was a decrease of 2.6%, while the entire year 2023 had an increase of 0.6%. Between March and April, prices went up 0.4%.
Wholesale trade serves as a crucial connection between manufacturers and consumers. Price reductions typically take some time and tend to impact buyers in some way. During April, the German inflation rate remained at 2.2%, marking its lowest point in nearly three years.
A major factor causing the drop in wholesale prices over the prior month was the chemical industry, with prices down 17.9% in April 2023 compared to April 2022. Other categories also saw declines, such as grains, raw tobacco, seeds, and feed (-12.2%); ores, metals, and semi-finished metal products (-7.2%); old materials and waste (-6.8%); milk, dairy products, eggs, edible oils, and fats (-6.3%); and tobacco products (+5.0%). On a brighter note, prices for coffee, tea, cocoa, and spices (+9.3%) and for sugar, sweets, and baked goods (+7.2%) were higher than the previous year.
The Federal Statistical Office announced a change in the reporting base year from 2020 to 2021. Consequently, the weights and basket used to measure the indices were modified. The update in the base year is part of a regular process that occurs every five years to account for shifts in purchase patterns.
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The German economy, which is known for its robustness, is currently experiencing a decrease in wholesale prices, which are predominantly influenced by German industries like chemistry and agriculture. This decrease might indirectly contribute to a reduction in the country's inflation rate, as observed recently.
Despite the decline in wholesale prices, some specific product categories, such as coffee, tea, and sugary goods, experienced an increase in prices compared to the previous year, signaling a disparity within the overall German inflation trends.
Source: www.ntv.de
