German producer prices rise at fastest pace in over 3 years

Producer prices in Germany increased more than expected in July, recording their sharpest annual rise in more than three years, official data showed Thursday.

Prices of industrial products rose 3% from a year earlier, accelerating from a 1.8% increase in June and exceeding market expectations of a 2.7% gain, according to the Federal Statistical Office (Destatis).

The reading marked the fastest annual increase since April 2023.

On a monthly basis, producer prices jumped 1.1%, more than double the market forecast of 0.5%, after falling 0.3% in June.

Intermediate goods were the main driver of the annual increase, with prices rising 5.4%, largely due to higher costs for metals, precious metals and copper products.

Energy prices increased 3.8% year-on-year, supported by higher prices for petroleum products, heating oil, motor fuels and natural gas, while lower electricity prices limited the rise.

Prices rose 2.3% for capital goods and 2% for durable consumer goods. By contrast, prices for non-durable consumer goods declined 2.3%.

Excluding energy, producer prices were 2.7% higher than in July 2025.

Producer prices measure price developments at the factory gate and are considered an early indicator of future consumer inflation.