Germany's producer price inflation eased more-than-expected in June to its lowest level in two years, the Federal Statistical Office said Friday.
The producer price index rose 1.6 percent year-on-year in June, marking the lowest rate of inflation since May 2010, when it stood at 0.9 percent. The figure slowed for the third month in a row.
Economists had expected the rate to slow to 1.8 percent from May's 2.1 percent. Excluding energy, core producer prices increased 1 year-on-year in June.
Inflationary pressures are easing in the biggest Eurozone economy. Germany's harmonized inflation slowed to 2 percent in June, moving close to the European Central Bank target. During the same time, Eurozone inflation remained at 2.4 percent.
Citing weak economic outlook and the absence of an inflation threat, the ECB reduced its benchmark interest rate this month to below 1 percent for the first time on record. The main refinancing rate was slashed by 25 basis points to 0.75 percent.
ECB President Mario Draghi said inflationary pressure over the policy-relevant horizon has been dampened further as some of the previously identified downside risks to the euro area growth outlook have materialized.
Month-on-month, German producer prices fell 0.4 percent compared to 0.2 percent decline forecast. The producer price index, excluding energy, fell slightly by 0.1 percent. Energy prices logged a monthly decline of 1.4 percent.
Prices of consumer goods were higher by 2.2 percent than in the same period of last year and food prices gained 2.4 percent. Prices of durable and capital goods advanced 1.7 percent and 1.1 percent, respectively. Intermediate goods prices gained only 0.1 percent.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.