German Producer Inflation Hits 3-Year High
Producer prices in Germany increased 2.2% year-on-year in May 2026, after a 1.7% rise in April, marking the second straight month of inflation. It was the fastest increase in producer prices since May 2023, though below market forecasts of 2.5%, mainly driven by higher prices for intermediate goods (4.2%) and energy (2.5%), with a sharp rise in mineral oil prices (34.9%) due to the Middle East conflict. Prices also rose for capital goods (2.0%), boosted by higher machinery costs, as well as motor vehicles, trailers, and semi-trailers, while durable consumer goods advanced 2.0%. By contrast, prices for non-durables dropped 1.7%, mainly due to cheaper food, particularly butter and pork. Excluding energy, producer prices rose 2.3%. On a monthly basis, producer prices rose 0.3%, slowing sharply from a 1.2% gain in April and falling short of expectations for a 0.7% increase, marking the softest monthly increase since February, when producer prices fell.
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