FX.co ★ German Producer Inflation Hits 3-Year High

Germany’s producer prices rose 2.2% year-on-year in May 2026, up from a 1.7% increase in April and marking a second consecutive month of producer price inflation. This was the fastest annual gain since May 2023, though it came in below market expectations of 2.5%.

The overall increase was largely driven by higher prices for intermediate goods (up 4.2%) and energy (up 2.5%), with mineral oil prices surging 34.9% amid the conflict in the Middle East. Prices for capital goods climbed 2.0%, supported by rising machinery costs as well as higher prices for motor vehicles, trailers, and semi-trailers. Durable consumer goods also advanced by 2.0%.

In contrast, prices for non-durable consumer goods fell 1.7%, primarily reflecting lower food prices, especially for butter and pork. Excluding energy, producer prices increased by 2.3% year-on-year.

On a monthly basis, producer prices rose 0.3% in May, a sharp slowdown from the 1.2% increase recorded in April and below forecasts of a 0.7% rise. Nonetheless, this marked the third consecutive monthly increase in producer prices.