Producer prices in Germany fell by 1.5% year-on-year in July 2025, following a 1.3% decline in June and surpassing market expectations of a 1.3% drop. This marked the fifth consecutive month of falling producer prices and the sharpest annual decline since June 2024. The overall decrease was largely driven by lower energy costs, which fell 6.8%. Key contributors within the energy sector included natural gas (-8.6%), mineral oil products (-7.9%), electricity (-7.8%), heating oil (-5.7%), and motor fuel (-3.9%). Additionally, prices for intermediate goods decreased by 0.9%. Conversely, prices rose for non-durable consumer goods (3.5%), durable consumer goods (1.9%), and capital goods (1.8%). Excluding energy, producer prices climbed 1.0%, after a 1.3% rise in June. On a monthly basis, the producer price index unexpectedly edged down 0.1% in July, reversing a 0.1% increase in June and missing forecasts of a 0.1% gain.