German PPI Misses Expectations as Energy Costs Drop 1.8%

German producer prices fell 0.3% in June from May, more than the 0.2% decline economists had forecast, as energy costs dropped sharply.

Excluding energy, producer prices rose 0.2% on the month, the Federal Statistics Office said. The headline decline was driven by a 1.8% monthly drop in energy prices, with petroleum product prices sliding 7.4%.

On an annual basis, producer prices were up 1.8% in June, matching the prior month's pace. Energy prices rose 0.4% from a year earlier, while intermediate goods climbed 5.1%, supported by an 11.8% surge in metal prices and a 12.9% jump in basic chemicals. Prices for capital goods edged up 0.2% month-on-month, and consumer goods were flat.

The data show price pressures spreading beyond energy into intermediate goods, a pattern the Bundesbank has flagged as a risk to the inflation outlook.