Germany’s import price index registered a decline of 1.4% in October compared to the same period last year, according to data released by the Federal Statistical Office. While this marks a continuation of the downward trend seen in recent months-September saw a -1.0% change and August a -1.5%-the index saw a slight uptick of 0.2% compared to the previous month. Export prices, conversely, experienced a moderate increase of 0.5% year-on-year, a slowdown from previous months and suggesting a potential cooling in external demand.
The primary driver behind the import price decrease was a significant drop in energy costs, which plummeted by 15.1% compared to October 2024. Across all energy sources, including crude oil, natural gas and electricity, prices were notably lower. However, excluding energy, import prices remained essentially unchanged year-on-year, highlighting the disproportionate impact of energy price volatility on Germany’s import bill.
Beyond energy, specific categories witnessed mixed trends. Investment goods saw a small decrease, while agricultural imports were notably cheaper, particularly live pigs, raw cocoa and grains. However, certain food staples have become significantly more expensive, notably raw coffee, onions and beef. This points towards potential inflationary pressures within the food sector, impacting consumer spending and raising questions about food security.
The export price increase was largely influenced by rises in consumer and intermediate goods, hinting at strengthening external demand, albeit moderated from earlier periods. Similar to import trends, food exports, particularly coffee, contributed significantly to this increase. Conversely, dairy fats and various cocoa products saw price declines, potentially reflecting adjustments in global supply chains.
The figures underscore a complex economic picture for Germany. While decreased energy prices offer some relief, the persistent rise in specific food prices and the limited price increases in other import categories signal potential vulnerabilities. The relatively small rise in export prices may indicate a weakening global demand, which, coupled with rising domestic production costs, could present a challenge for German manufacturers in the coming months. Furthermore, the diverging trends between import and export price levels may exacerbate Germany’s trade balance challenges.
The data raises questions regarding the long-term sustainability of Germany’s trade surplus and the potential need for policy intervention to address rising food prices and ensure stable supply chains.
