German producer price inflation eased to its lowest level in more than two years in July amid a fall in production costs for electricity and intermediate goods, a report from the Federal Statistical Office showed Friday.
Pipeline inflation eased to 0.9 percent from 1.6 percent in June. Economists had expected the rate to ease to 1.2 percent in July. The figure slowed for the fourth month in a row.
That was the lowest rate of inflation since May 2010, when the PPI rose at the same pace. A lower inflation rate was last recorded in April 2010, when the index was up 0.6 percent.
Electricity prices declined 5.2 percent on an annual basis, while production costs of intermediate goods dropped 0.3 percent. Energy, capital goods and consumer goods industries recorded an increase in producer prices during the month, putting some upward pressure on the overall PPI.
Excluding energy prices, the producer price inflation came to 0.6 percent.
Compared to June, the producer price index remained unchanged against the forecast for a 0.3 percent rise. In June, the index recorded a 0.4 percent fall. Stripping off energy, prices declined 0.2 percent in July.
Price pressures in the biggest euro area economy has remained generally weak. Inflation, as measured by the harmonized index of consumer prices, eased to 1.9 percent in July from 2 percent in June, according to official data released earlier this month.
The European Central Bank has maintained that there is no threat of inflation in any of euro area economies at present. The German economy grew 0.3 percent quarter-on-quarter in the second quarter supported mainly by final consumption expenditure and net exports. GDP rose 0.5 percent in the first quarter.
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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.