German producer prices posted their biggest annual decline in more than 22 years in June, driven by a sharp drop in energy costs, Federal Statistics Office data showed.

Producer prices fell by 4.6 per cent year-on-year in June, the steepest decline since December 1986, the office said. Month-on-month, prices dropped by 0.1 per cent.

Rainer Guntermann, an economist at Dresdner Kleinwort, said that despite the sharp fall, he saw no serious risk of deflation afflicting Europe’s largest economy yet.

“We’ll probably see an even bigger decline in July, which could be the trough.” – (Reuters)