BREAKING NEWS
This content is not available in your region

Jump in German producer prices points to higher inflation pressure

Access to the comments Comments
Jump in German producer prices points to higher inflation pressure
Jump in German producer prices points to higher inflation pressure   -   Copyright  (c) Copyright Thomson Reuters 2021. Click For Restrictions - https://agency.reuters.com/en/copyright.html
Text size Aa Aa

BERLIN (Reuters) – German producer prices rose by 5.2% year-on-year in April, the biggest increase in nearly a decade, data showed on Thursday, in a further sign that supply bottlenecks are leading to increased inflation pressure in Europe’s largest economy.

The rise in producer prices followed a 3.7% year-on-year increase in March and compared with a Reuters poll forecast of 5.1%.

Compared to the previous month, producer prices were up 0.8% in April, the federal statistics office said.

The index looks at factory gate prices, meaning before products or components are further processed or go on sale. It can therefore give an early indication of the development of overall consumer price inflation.

“Price pressures continue to point upwards also at the producer level,” LBBW economist Jens-Oliver Niklasch said.

“At the moment, it’s difficult to say how much of the costs companies will actually be able to pass on to consumers,” he added.

The supply bottlenecks and overall economic recovery are expected to push up price pressures in Germany, with the government forecasting consumer price inflation to jump to 2.2% this year and to ease to 1.5% next year.

Still, European Central Bank board member Isabel Schnabel told German broadcaster ARD on Wednesday that the surge in euro zone inflation is temporary and consumer prices should fall sharply next year.

(Reporting by Michael Nienaber; Editing by Toby Chopra)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.