"Hasn't happened before": Prices for imports have fallen surprisingly sharply

Imports to Germany are cheaper for the third month in a row, but are still more expensive than a year ago.

"Hasn't happened before": Prices for imports have fallen surprisingly sharply

Imports to Germany are cheaper for the third month in a row, but are still more expensive than a year ago. Nevertheless, at the end of last year, the price fell even more than experts had assumed.

Imports fell 4.5 percent in November compared to October. "There has never been a price drop of this magnitude compared to the previous month," said the Federal Statistical Office. Experts had expected significantly less. Since the German economy obtains many preliminary products and raw materials from abroad, falling import prices also reach consumers with a delay.

Measured against the same month last year, import prices rose "only" by 14.5 percent. In August there was a 32.7 percent increase since 1974, since then inflation has been falling.

Cheaper energy in particular was responsible for the third decline in a row: its imports fell by 16.1 percent. Compared to the previous year, however, it still increased by 37.9 percent.

"The increase compared to the previous year is still mainly due to the price increases for imported natural gas," the statisticians explained. These prices were 42.7 percent higher than in November 2021. Imported petroleum cost 28.8 percent more than a year earlier, petroleum products even 41.0 percent more, while electricity was 2.8 percent cheaper.

The unexpectedly strong decline in December 2022 gives hope that the sharp rise in prices for consumers will abate: lower energy prices and the state advance payment for natural gas caused consumer prices to rise by only 8.6 percent compared to the same month last year. Inflation fell to 10.0 percent in November after hitting a 10.4 percent high in October, the highest level since 1951.

"This strengthens the suspicion that the high point of inflation is behind us," said LBBW economist Jens-Oliver Niklasch. Nevertheless, this is unacceptably high. "The fight against the inflation that sparked last year remains a marathon, not a sprint," said Niklasch. The ECB is actually targeting a rate of two percent. Bundesbank President Joachim Nagel also told ntv in an interview: "It will be some time before inflation gets there again."