BERLIN, Jan. 19 (Xinhua) -- Producer prices for industrial products in Germany fell for the sixth month in a row, down 8.6 percent year-on-year in December 2023, the Federal Statistical Office (Destatis) said on Friday.
Following the "very pronounced increases" in 2021 and 2022, prices "remained at a high level," Destatis said. On an annual average basis, producer prices in Europe's largest economy decreased by 2.4 percent in 2023 compared with 2022.
In December 2023, lower energy prices continued to be the main reason for the year-on-year decline in producer prices, according to Destatis.
"The effect of lower energy costs will, however, probably fade in the coming months," Axel Lindner, deputy head of the Department of Macroeconomics at the Halle Institute for Economic Research (IWH) told Xinhua on Friday.
"Consumer price inflation in 2024 will depend less on production costs for industrial goods than on general wage developments in Germany and on whether decreasing profits will serve as a buffer against the comparably high increases of wages," Lindner stressed.
Inflation in Germany rose to 3.7 percent in December after falling since the middle of the last year, according to official figures.
For 2024, the German Institute for Economic Research (DIW Berlin) is expecting inflation to fall to 2.4 percent, before returning to the 2 percent target of the European Central Bank (ECB) in 2025.
