Producer energy costs continue to rise

In August, producer prices continued to rise yet at a continued slower pace. The producer price index was 7.8% higher than a year ago. A month-on-month rise of 0.4% was accounted for by appreciation in energy production (1.5%). Energy producer price rises were determined by a rise in the retail price of natural gas. Under its impact, the producer price level of goods sold in the domestic market grew 0.8% month-on-month. The prices of exported production dropped 0.1% month-on-month, reflecting stabilization in global prices. It became cheaper to produce exported food wood pulp products. The annual rise in both goods sold domestically and in exported products was accounted for by the rising costs of production of energy, food, metal and chemical products.

In the near future a rapid rise in producer prices is not expected, but they will continue to be impacted by the rise in energy costs that follows global trends with a delay. The development of producer prices will continue to be determined by global price dynamics. At the moment, global commodity prices have stabilized, which is reflected in the dynamics of producer prices, yet their future development is uncertain. Pressure on price rises can be expected to be eased by slower global growth and dropping demand. Yet the development of supply side is not as clear: it can be affected both by the political situation in producer countries and – like in the case of food – weather conditions.