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Factory Gate Inflation at New Highs

GERMAN DATA
MNI (London)

GERMANY MAR PPI +4.9% M/M, +30.9% Y/Y, FEB +25.9% Y/Y

  • Today's March PPI print highlights the first inflationary impacts of the Ukraine war and associated sanctions.
  • Germany's energy-intensive manufacturing industry and high reliance on Russian energy have generated acute price pressures in March.
  • German factory-gate inflation accelerated faster than forecasted in the March print, rising 4.9% m/m (fcst +2.7%, Feb +1.4%).
  • Compared to March 2021, PPI saw a 5pp point jump to +30.9% (fcst 30.0%, Feb 25.9%), almost 10pp above the 1950's post-WWII highs.
  • The key driver remained energy prices, which rose 83.8% y/y in March and by 10.4% compared to the month prior.
  • Natural gas prices over doubled to +144.8% y/y, followed by electricity (+85.1% y/y). Mineral oil increased 61.3% y/y, and a significant +25.8% m/m in March.
  • Core PPI was +14.0% y/y, +2.3% m/m as intermediate goods rose 3.5% m/m, with metals and fertiliser seeing strong upwards pressures.

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