Wholesale prices fall for eighth month in a row
German wholesale prices fell more slowly in November, but continue to signal a decline in inflationary pressure. According to the Federal Statistical Office, they fell by an average of 3.6% in November compared to the same month last year due to cheaper petroleum products.
This is the eighth decline in a row. However, it was slower than in October and November, when the sharpest declines since the beginning of the coronavirus pandemic in spring 2020 were recorded at minus 4.2% and 4.1% respectively. Prices also fell from October to November, by 0.2% (October: -0.7%).
Wholesalers are considered to be the link between manufacturers and end customers, and price reductions are usually delayed and at least partially also reach consumers. Economists therefore expect the inflation rate to continue to fall. In November, consumer prices rose by 3.2%, the weakest rate in over two and a half years.
The biggest influence on the development of wholesale prices last month was once again mineral oil products such as petrol, which had risen particularly sharply a year ago following the Russian invasion of Ukraine. These were now 13.9 percent cheaper. "The main reason for this is a base effect due to the high price level in the same period last year," it said.
Cereals, raw tobacco, seeds and animal feed (-24.3%), chemical products (-20.9%), ores, metals and semi-finished metal products (-12.8%) and used and residual materials (-10.0%) were also significantly cheaper.
In contrast, wholesale prices for fruit, vegetables and potatoes were higher than in November 2022, rising by 14.8%. Sugar, confectionery and baked goods also rose noticeably by 10.1%. Wholesale prices also rose for drinks (+7.4%) and live animals (+7.2%).
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But despite the slower decrease in November, wholesale prices still followed a downward trend for the ninth consecutive month. Furthermore, analysts suggest that the decrease in wholesale prices might lead to a subsequent reduction in retail prices, as wholesalers often pass on price reductions to their customers.
Source: www.ntv.de
