German Wholesale Prices Signal Persistent Inflationary Pressures, Raising Political Concerns
Data released Thursday by the Federal Statistical Office (Destatis) indicates a complex and concerning trend in German wholesale prices, suggesting persistent inflationary headwinds despite recent easing. While prices decreased marginally by 0.2% compared to the previous month, December 2025 saw an overall increase of 1.2% year-on-year. This represents a slowdown from the 1.5% increase recorded in November and a slight uptick from the 1.1% increase in October, highlighting the volatility and underlying resilience of inflationary forces.
The primary driver of the year-on-year increase was a significant surge in prices for non-ferrous ores, non-ferrous metals and semi-finished products, which averaged a staggering 34.6% higher than in December 2024. A further 4.9% increase was observed compared to November 2025, suggesting continued demand and potential supply chain vulnerabilities – a critical factor as Germany rebuilds its industrial base following recent geopolitical disruptions.
Notably, the price of food and beverages also contributed significantly to the upward pressure. Consumers are increasingly feeling the impact of higher costs, as evidenced by a 2.4% year-on-year increase in this sector. Particular concern arises from the alarming 12.8% rise in prices for sugar, confectionery and baked goods and a 7.4% increase in coffee, tea, cocoa and spices – staples increasingly out of reach for lower-income households. Price hikes for meat and meat products (5.0%) further compound the burden on consumers.
While deflationary trends were observed in certain sectors, such as grains, raw tobacco, seeds and animal feed (-7.3%) and milk products (-3.3%), these declines appear insufficient to counteract the broader inflationary trend. The 3.1% drop in mineral oil products, although welcome, could be a temporary response to fluctuating global energy markets, rather than a sign of long-term stability.
Overall, the annual average for 2025 reflects a 1.0% increase in wholesale prices compared to 2024. This contrasts sharply with 2024, when prices were 1.3% lower than the previous year. The 3.9% increase in food and beverage prices over the year has drawn particular scrutiny, along with the egregious 26.2% surge in coffee, tea, cocoa and spices, spotlighting the potential for social unrest and exacerbating existing inequalities.
The substantial price increases in non-ferrous metals (24.6%) may also signal growing concerns about Germany’s reliance on critical mineral imports and the vulnerability of its industrial sector to global supply chain instability. While declines in data processing equipment, recycled materials, iron and steel goods and mineral oil products offered some respite, the overall data paints a picture of an economy struggling to contain inflation, raising serious questions about the effectiveness of current monetary policy and demands for a more robust governmental response. The figures are likely to fuel the debate surrounding the next round of social welfare adjustments and place increased pressure on policymakers to address the widening gap between price increases and wage growth.
