German Wholesale Prices Rise in July as Energy Tax Cut Expires
Key Takeaways
- •German wholesale prices increased 0.2% month over month in July and 5.3% year over year, following a 0.7% monthly decline and a 4.9% annual rise in June.
- •Petroleum product prices rose 4.0% on the month, largely because a temporary energy tax reduction on gasoline and diesel that had been in place since June 2022 expired at the end of June.
- •Non-ferrous ores, metals, and semi-finished metal products fell 3.9% month over month but were 27.8% higher than a year earlier, in line with this year's industrial metals rally that has taken copper to record highs.
- •Prices for information and communication technology equipment advanced 1.1% on the month and 9.0% year over year, adding to the headline annual increase.
- •The European Central Bank is keeping its deposit rate at 2% with a meeting-by-meeting, data-dependent approach, making upstream gauges like the wholesale price index part of the evidence monitored ahead of euro area inflation updates.
Key data:
- July wholesale prices: +0.2% month over month (prior: -0.7%)
- July wholesale prices: +5.3% year over year (prior: +4.9%)
German wholesale prices nudged higher in July, with the increase driven largely by another bump in the price of petroleum products, according to the monthly wholesale price data published by Germany's Federal Statistical Office (Destatis). The wholesale price index tracks the prices of goods sold by wholesalers and is closely watched as an early indicator of where consumer price inflation may be heading, since wholesale costs sit upstream of retail prices.
A key factor behind the July move was the expiration of the temporary reduction in the energy tax rate on gasoline and diesel, which lapsed after 30 June. That relief had been in place since June 2022, when Berlin cut the tax to the minimum level permitted under EU rules to cushion motorists from record fuel prices after Russia's invasion of Ukraine, and it had been extended several times before finally expiring. The end of that relief measure helped lift petroleum product prices by 4.0% on the month. Measured against July 2025, petroleum products are on average more than 24% more expensive than a year earlier.
Elsewhere in the index, prices for non-ferrous ores, metals, and semi-finished metal products declined by 3.9% on the month, though they remain well above their year-ago level, up 27.8% compared with the same month last year. The steep annual gain is in line with this year's broad rally in industrial metals, which has carried copper to record highs amid US tariff measures and supply disruptions.
The other notable increase in July came from information and communication technology equipment, which rose 1.1% on the month. That category is also posting a marked increase against July of last year, up 9.0% year over year, further amplifying the headline year-on-year estimate.
Taken together, the figures point to German wholesale prices continuing to nudge higher as a result of the US-Iran conflict — and not only in energy, even though energy still represents the biggest chunk of the increase relative to how prices were trending a year ago. With the European Central Bank holding its deposit rate at 2% and stressing a meeting-by-meeting, data-dependent approach, upstream gauges such as the wholesale price index remain part of the pipeline evidence watched ahead of euro area inflation updates.
Source: Investinglive
