German producer prices fall more than expected; exports to US dive

German producer prices declined at an accelerated rate in December, data published by the Federal Statistical Office showed on Tuesday.

German producer prices fell by 2.5% in December from a year before after a 2.3% annual decline in November and sharper than the FXStreet-cited market consensus of 2.4% deflation.

On a monthly basis, producer prices were down 0.2% in December after no change in November and more than an expected fall of 0.1%.

For all of 2025, producer prices in Germany were 1.2% lower on an annual average compared with 2024. However, when energy prices are excluded, producer prices in 2025 were 1.2% higher than in 2024. This is due to energy prices falling by an average of 6.2% in 2025 compared with 2024.

Separately, the statistical office reported that German exports to the US fell by 9.4% on-year in the first 11 months of 2025 to EUR135.8 billion, while imports increased by 2.2% to EUR86.9 billion.

The German trade surplus with the US was the lowest since the pandemic year of 2021, the office highlighted, falling to EUR48.9 billion for the first 11 months of 2025, down 25% from a record high of EUR64.8 billion a year prior.

The statistical office emphasised that motor vehicles remained the most important German export commodity, while noting: "As a result of the US government's tariff policy, German-American trade relations weakened significantly in 2025."

German motor vehicles and motor vehicles parts exports to the US fell by 18% on-year in the first 11 months of 2025 to EUR26.9 billion. Meanwhile the export of pharmaceutical products saw a 0.7% increase to EUR26.2 billion.