(CN) — Across the European Union, domestic industrial producer prices decreased 4% over the last year, contributing to decreasing inflationary trends, according to data published by Eurostat on Wednesday.
“The industrial producer price index measures price changes from the point of view of the producers/manufacturers of a product, it is thus an output price,” researchers said in the report.
Changes in manufacturing costs shape the prices consumers pay for goods and services and help economists forecast inflation rates.
The 4% drop since this time last year is part of a trend largely driven by a 10% decrease in costs to produce energy.
While dependence on Russian oil helped drive inflation to record highs in 2021, a diversified portfolio eased energy costs, along with inflation, which sits at about 2.6%.
In the spring economic forecast, the European Commission anticipated inflation to continue decreasing through the year, likely settling in near 2% by the beginning of 2025.
"While our policy path has helped to tame inflation, it has also dampened economic growth,” Christine Lagarde, president of the European Central Bank, said at a Monday forum.
Lagarde, who credits ECB policy for slowing the growth of inflation, named production as one of several unknown factors shaping the future European economy.
"Now, we are still facing several uncertainties regarding future inflation, especially in terms of how the nexus of profits, wages and productivity will evolve and whether the economy will be hit by new supply-side shocks,” Lagarde said. “And it will take time for us to gather sufficient data to be certain that the risks of above-target inflation have passed."
Between May 2023 and this year, production prices for capital goods increased nearly 2% along with durable and non-durable consumer goods — both of which are up less than 1% compared to last year.
Slovakia reported the largest drop in prices, 21%, compared to last year, followed by Poland, France and Latvia, which were each a few points below 7%. Luxembourg reported the highest increase in prices, nearly 18%, followed by Sweden and Czechia, which were near 1%.
Between April and May of this year, industrial producer prices decreased by just 0.2%, the slowest rate in nearly a year. Energy costs, which declined 1.3%, represented the greatest month-to-month change.
The data, Eurostat researchers said, indicates that prices remain stable and "historically high."
Follow @bright_lamp
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
Additional Reads
-
Putin, Xi vie for influence at Central Asian summit July 3, 2024 -
