By Nina Adam

FRANKFURT--German producer prices in December saw their strongest annual increase in about four years, a sign that inflationary pressures are building in Europe's largest economy.

Germany's statistics office said Friday producer prices rose 0.4% from November and were up 1.0% from December 2015. That marks the strongest year-over-year increase since January 2013. The outcome was in line with economists' forecasts.

Energy prices developed unevenly in December. While prices for light heating oil jumped about 40% from December 2015 and prices for diesel fuel and electricity were up about 13% and 4.5% respectively. Natural gas prices were sharply lower than in December 2015.

Excluding energy prices, which can be volatile, German producer prices rose 0.3% on the month and increased 1.2% on the year.

Consumer goods prices, which comprise food prices, rose markedly in December. Prices in this category increased 0.5% from November and were up 2.1% from December a year earlier.

Rising producer prices in Germany are likely to underpin expectations that consumer prices will continue to rise over coming months.

Write to Nina Adam at nina.adam@wsj.com<mailto:nina.adam@wsj.com>

(END) Dow Jones Newswires

January 20, 2017 02:48 ET (07:48 GMT)

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