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German producer prices see biggest jump in 26 years

AFP · 18 Jul 2008, 17:56

Published: 18 Jul 2008 17:56 GMT+02:00

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Prices gained 6.7 percent in June on a 12-month basis. "This was the highest year-on-year rate of price increase since March 1982," when it hit 7.2 percent, the Destatis office said in a statement. The figure also represented a sharp increase from the already strong annual rate in May of 6.0 percent.

As in recent months, the cost of energy was the main driver of higher producer prices, a statement by the Destatis office said. On a one-month basis, those prices gained 0.9 percent, it added.

On Wednesday, Destatis said the German consumer price index had jumped by 3.3 percent in June, its biggest increase since December 1993. Inflation has become a global scourge, devouring household budgets and prompting consumers to cut back on many non-essential items.

In the 15-nation euro zone, inflation hit a record 4.0 percent last month on the back of soaring oil prices.

Oil prices hit records over $147 a barrel in June, pinching the purchasing power of consumers already struggling to cope with soaring food prices. On Friday, oil prices rose in Asian trading after three days of heavy falls, with New York's main oil contract, light sweet crude for August delivery, adding 51 cents to $129.80 a barrel.

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In June, German industries paid 28 percent more for petroleum products, and 16 percent more for electricity, the Destatis data showed. Farmers meanwhile, saw the cost of fertilizers grow by an average of 79 percent.

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