Industrial producer prices in the EU fell last year

The development of prices in the EU countries was quite diverse last year, but growth moderated everywhere.

Industrial producer prices over the past three years have clearly reflected a series of geopolitical events that have affected the availability of goods and raw materials and disrupted global trade and production. In 2021, EU industrial producer prices rose sharply (by 12.4%) in the context of the shutdown and subsequent ramp-up of global production, leading to an imbalance in supply chains. At that time, the price of electricity also rose significantly. In 2022, the war in Ukraine broke out and added to the mentioned factors the risk of a shortage of oil and natural gas and another sharp increase in the price of electricity on the European market. This led to a 34.3% increase in EU industrial producer prices.

Last year, industrial producer prices in the EU fell by 2.1%. The decline was reflected in the drop in prices for mining and quarrying (–10.0%) and prices for electricity, gas, steam and air conditioning (–15.1%), as well as a significant slowdown in the growth of prices for goods and services in the manufacturing industry (from 17.6%) to 1.9%). In all EU countries, the price dynamics of industrial producers weakened and prices fell in 14 states. Industrial producer prices in Hungary (21.5%), Luxembourg (17.2%) and Slovakia (16.8%) showed a double-digit increase. In Hungary and Slovakia, the sharp rise in electricity and mining prices continued last year. In Luxembourg, electricity prices rose the most in the EU last year. In a European comparison, the Czech Republic ranks seventh in the ranking with 5.1%. Ireland (-25.6%) and Bulgaria (-12.5%) recorded a very deep drop in industrial producer prices. In both cases, a sharp drop in electricity prices was manifested in this way.

The dynamics of the price development of industrial producers in different countries had considerable dispersion last year. However, as in other price areas, the countries with higher growth were dominated by those from Central and Eastern Europe that joined the EU after 2000 – eight newer members were among the ten countries with the highest growth. On the other hand, only Bulgaria and Estonia from this group recorded a drop in prices last year. The development described mainly coincided with the dynamics of electricity prices, which in many countries of Eastern and Central Europe were still growing at a double-digit rate.