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4. Inflation is falling – but only slowly
The peak of the inflation wave is over. In parts of the economy, not only is inflation falling, but prices are actually falling. At least that is the case compared to the previous month. Some prices are even lower this spring than a year ago, especially for energy.
The fourth graph indicates what this means for the general inflation rate, i.e. for the development of consumer prices. It follows the prices at the upstream economic levels such as imports, producer prices and wholesale. The prices for consumers do not fluctuate that much. After the price shocks caused by the delivery bottlenecks in the corona pandemic and the Ukraine war, consumer prices did not rise as quickly and as strongly as prices in the commercial economy. On the other hand, they are not going back as quickly and strongly.
Conclusion: The general inflation rate should now be falling month by month. However, this will not go as steeply as in other areas of the economy. Individual products can certainly become cheaper for consumers. Overall, however, the upward trend in prices should continue for some time, albeit subdued.
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3. In wholesale, prices are falling significantly
Wholesale trade is even closer to consumers. Price data is already available here for May. According to the Federal Statistical Office, wholesale sales prices were 2.6 percent lower than a year ago. At this level, this was the second year-on-year price decline in a row. Compared to April, wholesale prices fell by 1.1 percent in May. The fall in prices has even accelerated.
In wholesale, too, falling energy prices in particular are helping to ease the situation. Oil products were 22.7 percent cheaper than a year ago. Food has become the biggest price driver. Consumers are also feeling this when looking at retail prices. But there are good signs here too: Grain, seeds and animal feed have become significantly cheaper. The price crisis is also easing in agriculture.
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4. Inflation is falling – but only slowly
The peak of the inflation wave is over. In parts of the economy, not only is inflation falling, but prices are actually falling. At least that is the case compared to the previous month. Some prices are even lower this spring than a year ago, especially for energy.
The fourth graph indicates what this means for the general inflation rate, i.e. for the development of consumer prices. It follows the prices at the upstream economic levels such as imports, producer prices and wholesale. The prices for consumers do not fluctuate that much. After the price shocks caused by the delivery bottlenecks in the corona pandemic and the Ukraine war, consumer prices did not rise as quickly and as strongly as prices in the commercial economy. On the other hand, they are not going back as quickly and strongly.
Conclusion: The general inflation rate should now be falling month by month. However, this will not go as steeply as in other areas of the economy. Individual products can certainly become cheaper for consumers. Overall, however, the upward trend in prices should continue for some time, albeit subdued.
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2. Producer prices rise more slowly
Overall, the price pressure is easing for companies that produce in Germany. True, they were producer prices for commercial products in April was still 4.1 percent higher than a year ago. Year-on-year, however, that was the slowest increase in two years. Our graphic shows this clearly. The increase in producer prices is now lower than the general inflation rate.
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3. In wholesale, prices are falling significantly
Wholesale trade is even closer to consumers. Price data is already available here for May. According to the Federal Statistical Office, wholesale sales prices were 2.6 percent lower than a year ago. At this level, this was the second year-on-year price decline in a row. Compared to April, wholesale prices fell by 1.1 percent in May. The fall in prices has even accelerated.
In wholesale, too, falling energy prices in particular are helping to ease the situation. Oil products were 22.7 percent cheaper than a year ago. Food has become the biggest price driver. Consumers are also feeling this when looking at retail prices. But there are good signs here too: Grain, seeds and animal feed have become significantly cheaper. The price crisis is also easing in agriculture.
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4. Inflation is falling – but only slowly
The peak of the inflation wave is over. In parts of the economy, not only is inflation falling, but prices are actually falling. At least that is the case compared to the previous month. Some prices are even lower this spring than a year ago, especially for energy.
The fourth graph indicates what this means for the general inflation rate, i.e. for the development of consumer prices. It follows the prices at the upstream economic levels such as imports, producer prices and wholesale. The prices for consumers do not fluctuate that much. After the price shocks caused by the delivery bottlenecks in the corona pandemic and the Ukraine war, consumer prices did not rise as quickly and as strongly as prices in the commercial economy. On the other hand, they are not going back as quickly and strongly.
Conclusion: The general inflation rate should now be falling month by month. However, this will not go as steeply as in other areas of the economy. Individual products can certainly become cheaper for consumers. Overall, however, the upward trend in prices should continue for some time, albeit subdued.
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Consumers are still suffering from soaring prices. In May, the inflation rate in Germany was 6.1 percent, only slightly below the peak from the autumn.
But improvement is in sight. At upstream economic levels, prices are rising much more slowly, in wholesale and for imports prices even fell again.
These charts showing the development of prices give hope that the price pressure in the shops is now easing.
Consumers in Germany are experiencing – and suffering – a historic wave of inflation. For many months, prices in shops or service providers have been rising faster and longer than they have been in decades. At 6.1 percent in May, the inflation rate was still only slightly below its peak of 8.8 percent in the autumn. “The crisis is far from over,” warns top consumer advocate Ramona Pop. But now the signs are finally increasing: inflation is falling, prices are stabilizing.
This shows the development at upstream levels in the economy. Manufacturers’ prices are rising much more slowly, while importers’ and wholesalers’ prices actually fell for the first time in April and May. This development should soon also apply to the consumer prices arrive. We show the important development at each stage.
1. Import prices are lower than last year
Import prices have been falling month by month for the past six months. This is mainly due to the prices for energy imports. They also rose the most after Russia’s invasion of Ukraine. In April 2023, import prices were even below the previous year again, by a strong 7.0 percent overall. This was the second year-on-year price decline in a row.
Energy imports in March were even 31.8 percent cheaper than a year ago and 6.6 percent cheaper than in February. The base effect plays a big role here, because energy prices rose sharply a year ago after Russia’s invasion of Ukraine.
But even without taking energy prices into account, import prices in April 2023 were 0.7 percent lower than a year ago for the first time. The chart shows that the major pressure from the price shocks in import prices is over.
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2. Producer prices rise more slowly
Overall, the price pressure is easing for companies that produce in Germany. True, they were producer prices for commercial products in April was still 4.1 percent higher than a year ago. Year-on-year, however, that was the slowest increase in two years. Our graphic shows this clearly. The increase in producer prices is now lower than the general inflation rate.
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3. In wholesale, prices are falling significantly
Wholesale trade is even closer to consumers. Price data is already available here for May. According to the Federal Statistical Office, wholesale sales prices were 2.6 percent lower than a year ago. At this level, this was the second year-on-year price decline in a row. Compared to April, wholesale prices fell by 1.1 percent in May. The fall in prices has even accelerated.
In wholesale, too, falling energy prices in particular are helping to ease the situation. Oil products were 22.7 percent cheaper than a year ago. Food has become the biggest price driver. Consumers are also feeling this when looking at retail prices. But there are good signs here too: Grain, seeds and animal feed have become significantly cheaper. The price crisis is also easing in agriculture.
External content not available
Your privacy settings prevent the loading and display of all external content (e.g. graphics or tables) and social networks (e.g. Youtube, Twitter, Facebook, Instagram etc.). To view, please activate the settings for social networks and external content in the privacy settings .
4. Inflation is falling – but only slowly
The peak of the inflation wave is over. In parts of the economy, not only is inflation falling, but prices are actually falling. At least that is the case compared to the previous month. Some prices are even lower this spring than a year ago, especially for energy.
The fourth graph indicates what this means for the general inflation rate, i.e. for the development of consumer prices. It follows the prices at the upstream economic levels such as imports, producer prices and wholesale. The prices for consumers do not fluctuate that much. After the price shocks caused by the delivery bottlenecks in the corona pandemic and the Ukraine war, consumer prices did not rise as quickly and as strongly as prices in the commercial economy. On the other hand, they are not going back as quickly and strongly.
Conclusion: The general inflation rate should now be falling month by month. However, this will not go as steeply as in other areas of the economy. Individual products can certainly become cheaper for consumers. Overall, however, the upward trend in prices should continue for some time, albeit subdued.
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