Germany Inflation Confirmed at 0.2% in December


German annual inflation rate was recorded at 0.2 percent in December of 2014, slowing from a 0.6 percent increase in the previous month. It is the lowest rate since October 2009, driven by falling energy prices.

Year-on-year, energy prices declined by 6.6 percent. Prices were down for heating oil (-22.8 percent), motor fuels (-12.1 percent) and gas (-1.4 percent). In contrast, electricity prices continued to rise (+1.9 percent).

Prices of food and non-alcoholic beverages fell by 0.6 percent from December of 2013 (including food -1.2 percent). Prices of edible fats and oils and vegetables declined from a year earlier (-10.7 percent and -7.9 percent respectively). Consumer also paid less for dairy products and eggs (-0.9 percent) and for meat and meat  products (-0.6 percent). In contrast, prices increased for coffee, tea and cocoa (+11.1 percent).

Cost of goods as a whole went down (-1.2 percent) while cost of services increased by 1.4 percent. Among goods, lower prices were recorded especially for  consumer electronics (-7.1 percent) and telephones (-6.4 percent), consumer electronics (-6.4 percent). Consumers had to pay higher prices than a year earlier, for pharmaceutical products (+4.9 percent) and newspapers and periodicals (+4.2 percent).
Among services, higher prices were seen on net rents exclusive of heating expenses (+1.4 percent), social facilities (+4.0 percent) and hairdresser services and other personal care services (+3.0 percent). In contrast, cost of telecommunication services declined further by 1.0 percent.

Compared with November 2014, consumer prices remained unchanged in December. Prices of food were up (+0.4 percent), mainly due to fruits (+3.3 percent). Meanwhile, cost of recreation and culture also increased by 2.9 percent, mainly due to holiday packages (+12.2 percent). In contrast, cost of energy was down (-2.4 percent), mainly due to heating oil (-14.2 percent) and gas (-0.7 percent). Prices also decreased for clothing and footwear (-0.9 percent); housing, water, electricity, gas and other fuels (-0.6 percent) and transport (-1.6 percent). 

The harmonized index of consumer  prices (HICP) rose by 0.1 percent in December of 2014 over the same month last year. Compared with the previous month, the index increased by 0.1 percent. The preliminary results for the HICP were confirmed.

For full year of 2014, the HICP accelerated by 0.8 percent as compared to the previous year. 

Germany Inflation Confirmed at 0.2% in December


Destatis l Rida Husna l rida@tradingeconomics.com
1/16/2015 9:18:02 AM