Producer prices down in the eurozone
In the Eurozone, producers' prices have fallen more than expected and indicate further decreasing pressure. The producers' prices in industry went back by 0.2 percent in May compared to the previous month, as Eurostat announced on a Wednesday. Economists surveyed by Reuters had only expected a decrease of 0.1 percent, after a decrease of 1.0 percent in April. Compared to the previous year, producers' prices in May had increased by 4.2 percent. Economists had mostly anticipated this. At the beginning of 2023, producers' prices were still in the double-digit percentage range within a year.
Energy costs, which fueled inflation earlier, are now dampening price growth: Producers' prices for energy decreased by 11.4 percent in May compared to the previous year. In the statistics, the prices of products are listed at the factory gate - that is, before they are further processed or traded. They therefore serve as an early indicator for the development of consumer prices. These rose by only 2.5 percent within a year in the 20-country union in June. In May, inflation had risen to 2.6 percent, after 2.4 percent in April.
Despite the decrease in producers' prices in the Eurozone causing further pressure, there's expectations of a stronger recovery in the energy sector. The predicted drop in producers' prices for energy is only 4.2 percent year-on-year in June, signifying a potential improvement in the Eurozone's Producer Price Index.
