FX.co ★ German Producer Prices Unexpectedly Fall

Producer prices in Germany experienced an unexpected decline of 0.2% year-on-year in March 2025, overturning February's 0.7% increase and falling short of market expectations for a 0.4% rise. This marked the first reduction in producer prices since October of the previous year, largely due to a decrease in energy costs, which fell by 3.6%. Specifically, electricity prices decreased by 4.3%, natural gas by 3.6%, and district heating by 1.9%. Conversely, there were price increases in non-durable consumer goods by 2.6% and durable consumer goods by 1.3%. The costs associated with capital goods also rose by 1.9%, notably in sectors such as machinery, which increased by 2.0%, and motor vehicles, trailers, and semi-trailers, which rose by 1.4%. Intermediate goods saw a price rise of 0.5%. When excluding energy, producer prices showed a 1.4% increase. On a month-over-month basis, the Producer Price Index (PPI) decreased by 0.7%, marking the fourth consecutive month of declines and the most significant drop since December 2023. This figure followed a prior three months of a 0.1% decrease and diverged from the market's anticipated 0.1% drop.