Berlin  - Germany's producer prices plunged at their fastest rate in 60 years, the German statistics office reported Wednesday.

The larger-than-forecast 7.8-per-cent fall in annual producer prices is likely to raise concerns about the impact of falling prices on Germany's economic performance. Month-on-month producer prices slumped by 1.5 per cent in July.

However, economists believe that inflationary pressures should start to re-emerge in the run-up to the end of the year as world economic growth gains ground.

The drop in producer prices comes in the wake of a sharp fall in energy prices and followed the release of data earlier this month showing annual German consumer prices posting their first drop in more than two decades to tumble by 0.5 per cent last month.

Analysts had expected July producer prices to fall month-on-month by 0.2 per cent and by 6.6 per cent compared to July 2008.

The year-on-year drop in July producer prices represented the biggest fall since the series began in 1949, the statistics office said. (dpa)