BERLIN, July 18 - German producer prices rose by 1.3 percent year-on-year in June, buoyed by higher electricity and gas prices, but were still slightly lower than expected. The Federal Statistics Office said on Friday the price of energy rose sharply from a year ago, up 5.2 percent. It said electricity was 7.3 percent dearer year-on-year, and gas 9.1 percent more expensive. Excluding energy, prices at the factory gate would have risen by just 0.4 percent year-on-year.
Month-on-month, headline producer prices fell 0.1 percent on the month. Analysts polled by had expected prices to hold steady on the month . Economists said they expected producer prices to inch down in the coming months, as lower oil prices helped partly by the strong euro filter through. "The rise was mainly due to energy," said Ulla Lahl, an economist at Mizuho Corporate Bank. "It will take a while for the lower oil price to be reflected in producer prices. But we won't see a broad based decline in prices. Oil should stabilise in the coming months so the declines won't be strong."
The statistics office said the price of heating oil was considerably lower than a year ago. However, petrol was 2.1 percent dearer than a year ago and diesel fuel was 2.5 percent more expensive. Excluding oil, the producer price index was up 1.4 percent year-on-year. Lahl said an expected rise in fresh food prices as a result of the dry summer weather that has damaged crops, could drive up prices in the months ahead. In May, prices at the factory gate, a key indicator for future consumer price inflation, fell 0.3 percent month-on-month for a year-on-year rise of 1.3 percent.//