Persisting decreased import prices continue to hold steady
In May 2020, Germany witnessed a notable decline in import prices, with the primary factor being a sharp decrease in energy import prices. The fall in energy import prices was substantial, decreasing by 5.2% compared to April 2020 and a more significant 18.0% compared to May 2019.
This substantial drop in energy import prices was largely influenced by the global context of lower fuel prices and reduced demand amid the COVID-19 pandemic. The pandemic heavily impacted commodity markets and energy prices worldwide, causing a ripple effect that was felt in Germany.
The prices for crude oil and natural gas also saw a significant decrease. Compared to May 2019, crude oil prices dropped by 59.8%, while natural gas prices fell by 40.9%. The prices for mineral oil products were 48.5% below those of May 2019, and energy import prices were 50.6% cheaper.
This decline contrasts with the general trend in other import price components, which showed smaller fluctuations or increases outside the energy sector at that time. The large drop in energy prices thus had a dominant effect on Germany's import price index in May 2020.
Other sectors also experienced a decrease in import prices. The prices for intermediate goods decreased by 3.8% compared to the previous year, and the prices for wood and pulp became 17.9% cheaper.
However, it's worth noting that energy import prices showed a significant increase of +9.0% compared to April 2020. Despite this increase, the overall trend in May 2020 was downward, with German import prices falling by 7.0% compared to the same month in 2019.
The decline in import prices also had an impact on export prices. The index of export prices was 1.2% below the level of May 2019, reflecting the global economic slowdown caused by the COVID-19 pandemic.
As the world continues to navigate the challenges posed by the pandemic, it will be interesting to see how these trends evolve in the coming months.
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