German producer, food prices higher

20th January 2011, Comments 0 comments

German producer prices climbed higher in December, official figures showed Thursday, with rising food and energy costs driving the sharpest gain since April 2009.

For all of 2010, food prices were 1.6 percent higher, the official Destatis office said.

Rising food prices have begun to ring alarm bells, especially in emerging economies, where the cost of food represents a higher percentage of household spending.

Producer prices climbed 0.7 percent in December from November and were 5.3 percent higher than in December 2009, Destatis said.

Analysts polled by Dow Jones Newswires had forecast more modest gains of 0.5 percent and 5.1 percent respectively for Germany, the biggest European economy.

The monthly rise was the strongest since April 2009.

The cost of energy was a key factor in the increases, gaining 1.5 percent on the month and 9.2 percent on the year, led by motor fuels.

For all of 2010, producer prices were 1.6 percent higher than in 2009.

Producer prices typically feed into consumer prices and in December, overall German inflation stood at a 12-month rate of 1.7 percent, Destatis said last week.

© 2011 AFP

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