German manufacturers raised prices by 1.8% year-on-year in June, a marked deceleration from previous months that signals easing pressure at the wholesale level.
The data, covering commercial products from food to industrial goods, suggests that the pass-through of earlier energy shocks is fading faster than anticipated.
This softening in producer prices aligns with recent consumer inflation data, which showed headline CPI slowing to 2.3% in June from 2.6% in May.
The convergence of cooling producer and consumer metrics reinforces the narrative that Germany’s inflationary pressures are subsiding, largely driven by lower energy costs.
Policymakers have already indicated that the recent drop in energy prices has led them to lower their inflation expectations for the year.
The June producer price data provides further evidence that the peak of the inflation cycle may have passed, reducing the urgency for aggressive monetary tightening.