German import prices for the month of February showed a 0.3% increase compared to the previous month. But when benchmarked against the same month a year ago, import prices were seen down 2.3%. The latter figure is the same for January and also December last year.
The main drag for the year-on-year decline in import prices had been energy prices. Compared to February 2025, energy prices were down nearly 21% when viewing the numbers for last month. So, that's the key factor in play. That as when you exclude energy prices from the equation, import prices were seen down just 0.2% compared to February last year.
As we get into March data next month, expect the picture above to change drastically.
Destatis already notes today that "the hostilities in Iran and the Middle East had no impact on the February import or export price results". But as energy prices soar in recent weeks, that is going to see a material jump in overall import prices in Germany.
And over time, that will even spill over to impacting import prices for the likes of capital goods, intermediate goods, and consumer goods. So, there is that to keep in mind.
That especially since the Middle East conflict doesn't seem to be finding much of a resolution yet. And with Iran still threatening key energy facilities across the region, that won't help in easing the upward pressure on natural gas prices in Europe.
To make matters worse, this is also coming at a time when German consumption is also showing some signs of weakness. That comes after the unexpected decline in retail sales in February here.
With higher energy prices set to hit in the months ahead, that will also weigh further on overall consumption and economic activity in Europe's largest economy.
