German wholesale deflation deepens as energy prices drop

(Sharecast News) - Wholesale prices in Germany declined for the sixth straight month in May, with the annual rate of deflation hitting an eight-month high, according to the Federal Statistical Office on Friday. Germany's producer price index fell by 0.2% last month, less than the 0.6% drop registered in April and slightly above the consensus forecast of -0.3%.

In year-on-year terms, producer prices were 1.2% lower than last May, following a 0.9% decline in April, matching market forecasts.

The decline was driven by a 6.7% year-on-year decrease in energy prices, as electricity prices slumped 8.1% and natural gas costs fell 7.1%, while prices for mineral oil, heating oil and motor fuel dropped 9.6%, 10.2% and 6.5%, respectively.

When excluding energy prices, producer prices were actually unchanged over the month and 1.3% higher than last year.