The decline in the prices of goods imported into Germany accelerated further in May. Import prices fell by 9.1 percent compared to the same month last year, as reported by the Federal Statistical Office. This is the sharpest drop since September 2009. In April, import prices had already fallen sharply by 7.0 percent, after having fallen in March for the first time in a long time in a year-on-year comparison.
As the Federal Office further announced, import prices fell by 1.4 percent month-on-month. A completely different picture emerged last summer. At that time, import prices had temporarily risen by more than 30 percent year-on-year. The triggers were the Ukraine war and significant tensions in world trade.
The Federal Office explains the drop in import prices in May with a statistical base effect: Because prices rose particularly sharply in the previous year, the comparison with the high price level at the time is low.
The effect is particularly evident in energy imports, which were 37.6 percent cheaper in May than a year ago. Natural gas had the greatest impact on the annual rate of change for energy. According to the Federal Office, prices here in May were 39.7 percent below those of May 2022.
Import prices also tend to influence consumer prices, on which the European Central Bank (ECB) bases its monetary policy. In the fight against high inflation, the ECB has raised its key interest rate significantly and announced a further interest rate hike for July.