German Wholesale Prices Plunge In June

FRANKFURT (AP) -- German wholesale prices fell by 4.6 percent in the year to June, the biggest annual drop in four decades, government statistics showed Monday.

The drop compared with a 3.6 percent year-on-year fall in May and was the largest since the producer price index declined by 5 percent in December 1968, the Federal Statistical Office said.

In month-on-month terms, producer prices were down 0.1 percent in June after standing still in May.

Energy prices were the main factor behind the year-on-year drop, the statistical office said. They were down 8.4 percent from June 2008, when prices of oil and fuel were at record highs.

Prices for oil products were down more than 24 percent, while electricity and gas prices were down 5.7 percent and 3.5 percent respectively.

Metal prices dropped more than 20 percent, with the price of rolled steel falling particularly sharply -- more than 31 percent -- as industrial production was cut on weaker demand.

Producer prices for industrial products, a measure of price pressures at the factory gate, are seen as an important gauge of inflation before it reaches consumers. Germany's annual consumer price inflation rate in June was a minimal 0.1 percent.