Producer prices in Germany fell by 2.2% yoy in August 2025, following a 1.5% decline in June and exceeding market expectations of a 1.7% drop. This marked the sixth consecutive month of annual producer price declines and the sharpest since May 2024, when prices also fell at the same rate. The overall decrease was primarily driven by lower energy costs, which dropped 8.5%. Key contributors within the energy sector included natural gas (-11.0%), electricity (-10.8%), heating oil (-7.5%), mineral oil products (-7.3%), and motor fuel (-2.5%). Prices for intermediate goods also declined by 1.0%. In contrast, price increases were recorded in non-durable consumer goods (3.3%), durable consumer goods (1.7%), and capital goods (1.8%). Excluding energy, producer prices rose 0.8%, following a 1.0% increase in July. Monthly, the producer price index fell 0.5% in August, after a 0.1% decline in July and steeper than the expected 0.1% drop, marking the sharpest monthly decline in four months.