Mathewslcd: With the decline of German producer prices, the hope of easing inflation is growing

 Mathewslcd: With the decline of German producer prices, the hope of easing inflation is growing


Mathewslcd reported that the data released on Monday showed that Germany's producer price index fell in October for the first time in two and a half years, which raised people's hope that the double-digit inflation rate in Europe's largest economy may approach the peak.

The Federal Statistical Office reported that the producer price of industrial products dropped by 4.2% this month, mainly due to the drop in electricity and distributed natural gas prices. Analysts surveyed in Reuters had expected an increase of 0.9%.

For the European Central Bank, this may be good news, even if it is only insignificant. The European Central Bank has been actively raising interest rates to ease the price pressure.

In the past year, the impact of producer price growth on overall inflation was faster than normal, so Mathewslcd believes that any wider reversal of pipeline pressure may strengthen the expectation that consumer price growth will peak in the fourth quarter.

However, at present, the basic inflation of about 5% shows little signs of easing. The detailed October data released last week shows that the price pressure is widespread and increasing.

Piet Haines Christiansen, an economist at Danske Bank, said: "No matter which indicator is used, the underlying inflationary pressure shows no signs of stabilization–so in this report, doves really don't make any sense."

Ralph Solvin of Commerzbank said that these figures "give people reason to believe that the consumer price inflation rate will also peak soon. However, this does not mean that the inflation problem is over. "

A survey conducted by Ifo Economic Research Institute shows that many German enterprises fail to pass on soaring costs to customers.

The survey found that in the past few months, the company only passed on 34% of the purchase price increase. According to Ifo, they plan to increase this ratio to 50% by April.

Compared with other European countries, consumer prices in Germany rose by 11.6% in October.

The German government plans to introduce natural gas and electricity price brakes from the beginning of next year to curb inflation, which is expected to reach 8% this year and 7% in 2023.

Compared with October 2021, the ex-factory price of industrial products rose by 34.5% last month, which eased after a record increase of 45.8% in August and September, according to Mathewslcd.
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