BERLIN, Aug 20 (Reuters) – German producer prices rose at their fastest pace in over three years in July, driven by higher costs for intermediate goods and energy, the federal statistics office said, adding to signs of renewed inflationary pressure in Europe’s largest economy.
Prices charged by manufacturers for goods ranging from food to industrial products increased by 3.0% year-on-year, the office said on Thursday, outpacing the forecast from analysts polled by Reuters for a 2.7% increase.
That was the strongest increase since April 2023 and marked a sharp acceleration from the 1.8% rise recorded in June.
Producer prices measure costs at the factory gate before goods reach wholesalers and retailers and are therefore regarded as an early indicator of future inflation.
On the month, producer prices climbed 1.1%.
“Conditions at the early stages of the inflationary surge have suddenly become uncomfortable,” said Alexander Krueger, chief economist at Bank Bethmann HAL. “The war involving Iran is leaving its mark, as is the heat.”
Record-low water levels in the Rhine River have been hampering inland shipping on Germany’s most important waterway for weeks, driving up transport costs.
The primary driver of the price increases was intermediate goods, which became 5.4% more expensive on average compared with the same month last year. Energy prices also increased at an above-average rate, rising 3.8% year-on-year.
(Reporting by Rene Wagner in BerlinAdditional reporting by Kira Britten and Cian MuensterWriting by Miranda MurrayEditing by Friederike Heine)
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