Import prices in Germany have experienced the largest year-on-year decline in August since November 1986.
The German Statistics Office said on 29 September that import prices dropped by 16.4 per cent in the month of August compared to the same period last year, which is in line with analysts’ expectations in a Reuters poll.
Compared with July 2023, import prices were up 0.4 per cent in August 2023, after having fallen consistently month on month since September 2022.
Reuters reported that the drop in price can primarily be attributed to a cascading impact originating from the significant price increases experienced in 2022 due to the war in Ukraine.
According to Statistisches Bundesamt, drop in import prices were due to much lower energy prices.
Energy imports in August 2023 cost 54 per cent less than in August 2022 but were 4.1 per cent more expensive than in July 2023.
Export prices in August 2023 also decreased substantially year on year, dropping 5.1 per cent from August 2022. Compared with the previous month, export prices rose by 0.1 per cent.
Because Germany relies largely on sourcing its products and raw materials from abroad, the impact decreasing import prices have on the country’s general inflation is often delayed.
The prices of imported intermediate goods were 9.7 per cent lower in August 2023 than in August 2022, and the prices of imported agricultural products were 1.5 per cent lower than in August 2022.
In August 2023, Sea-Intelligence reported that annualised growth rate of loaded imports has recommenced compared to the pre-pandemic year 2019, with an average of 2.7 per cent during the second quarter of 2023.