Germany experienced a significant 9.1% decrease in import prices during May 2023 compared to the same month in 2022, according to the latest report by the Federal Statistical Office (Destatis). This marks the most substantial price drop since September 2009, when prices fell by 11.4% due to the global financial crisis.
The primary factor contributing to this decline is the base effect resulting from the high price levels in the previous year, driven by the conflict in Ukraine. In April 2023, the year-on-year change in import prices was already at -7.0%, followed by -3.8% in March 2023. Additionally, import prices fell by 1.4% compared to April 2023.
The sharp decline in energy prices significantly influenced the overall index, with energy imports being 37.6% cheaper than in May 2022, only three months after the start of the Russian invasion of Ukraine. Specifically, natural gas prices dropped by 39.7% compared to May 2022, and electricity prices fell by 53.9%. Other imported energy sources, such as coal (-53.2%) and petroleum products (-35.9%), also experienced considerable price decreases.
Excluding energy prices, import prices in May 2023 were 1.7% lower than in May 2022 and 0.6% lower than in April 2023. When excluding only petroleum and petroleum products, the import price index was 6.3% lower than the previous year and 0.9% lower compared to April 2023.
Furthermore, prices for imported intermediate goods dropped by 8.2% year-on-year, while imported agricultural goods became 2.1% cheaper compared to May 2022. However, consumer goods’ prices increased by 3.5% compared to the previous year, driven by higher food prices.
On the export front, the prices for exported investment goods rose by 5.2% compared to the previous year, with machinery and motor vehicle parts experiencing significant increases. Exported consumer goods’ prices also increased by 4.7%, while exported intermediate goods became 1.7% cheaper than in May 2022.
The report indicates that Germany’s import and export price dynamics are undergoing notable changes, primarily influenced by global economic developments and the energy market. As the situation continues to evolve, policymakers and businesses will closely monitor these trends for potential implications on the economy and trade.
https://www.destatis.de/DE/Presse/Pressemitteilungen/2023/06/PD23_256_614.html