The rise in prices for goods imported into Germany weakened again at the beginning of the year. Cheaper energy is mainly responsible for the decline. But the sinking import prices only reach consumers with a delay.
Imports to Germany became cheaper again at the beginning of the year. Import prices fell in January by 1.2 percent compared to the previous month and thus for the fifth time in a row, as reported by the Federal Statistical Office. Economists had expected minus 1.5 percent. Cheaper energy in particular was responsible for the decline: its imports fell by 8.9 percent in December.
"Import prices continued their downward trend," said chief economist Thomas Gitzel from VP Bank. Since the German economy obtains many preliminary products and raw materials from abroad, falling import prices also affect general inflation and consumers with a delay. Because of the consequences of the Ukraine war, imports to Germany increased in price by an average of 26.3 percent last year, which is more than they have been since 1974 due to the first oil crisis.
Since September, however, inflationary pressure has eased noticeably. Compared to January 2022, import prices at the beginning of this year were only 6.6 percent higher overall. Imported energy was 8.1 percent more expensive than a year ago, mainly due to expensive natural gas. The prices for consumer and intermediate goods were also higher than a year ago. Imported agricultural goods prices were 7.1 percent higher than a year earlier and 2.3 percent higher than in December.
Live pigs (99.5 percent), eggs (70 percent) and cereals (11.1 percent) were more expensive than in the same month last year, while raw coffee was imported a good three percent cheaper. Inflation in Germany accelerated significantly at the beginning of the year. Consumer prices in January rose by an average of 8.7 percent year-on-year, after 8.1 percent in December and 8.8 percent in November.
The Federal Statistical Office recently declared that there are increasing price increases for services as well. "The development of import prices will also have a positive effect on the consumer price index with a slight time lag," emphasized analyst Gitzel. "Looking at the coming months, a noticeable drop in the inflation rate is to be expected."
