German December Inflation Rate Confirmed at 1.7%


German consumer price inflation stood at 1.7 percent year-on-year in December 2017, unrevised from the preliminary estimate and compared to 1.8 percent in the previous month. Energy inflation eased while cost of food and services rose at a faster pace.

Year-on-year, prices of goods increased by 1.8 percent, slowing from a 2.1 percent rise in the preceding month, as energy prices went up at a softer pace while cost of food grew further. Prices also increased for newspapers and periodicals (5.1 percent), tobacco products (4.6 percent), and pharmaceuticals products (2.6 percent). Meanwhile, cost of consumer electronics fell 1.1 percent. 

Energy prices were up 1.3 percent, compared to a 3.7 percent rise in a month earlier. Prices increased mainly for heating oil (4.0 percent) and electricity (2 percent), while consumers paid less for gas (-2.6 percent).

Food and non-alcoholic beverages prices went up by 2.9 percent, compared to a 2.8 percent increase in November. Price increases were observed for most food product groups, especially for edible fats and oils (16.6 percent), dairy products (10.1 percent) and fruit (7.6 percent). Vegetable prices were markedly down (-6.1 percent).

Services inflation edged up to 1.6 percent from 1.5 percent in November, mainly the result of the development of net rents exclusive of heating expenses (1.7 percent). Upward pressure also came from: package holidays (4.2 percent); maintenance and repair of vehicles (3.8 percent); and in-patient health services (3.5 percent). Meantime, consumers paid less for insurance services for transportation (-9 percent) and services of social facilities (-7.6 percent).

On a monthly basis, the consumer price index rose markedly by 0.6 percent in December, after a 0.3 percent gain in November. Prices rose for: package holidays (20.1 percent); air tickets (4.7 percent); rail fares (2.1 percent); and food (0.8 percent). By contrast, cost fell for energy (-0.1 percent), clothing (-2 percent) and footwear (-1 percent).

The harmonised index of consumer prices rose by 1.6 percent from the previous year and by 0.8 percent month-over-month.

Considering 2017, the inflation rate surged to 1.8 percent, compared to 0.5 percent in 2016
mostly boosted by a recovery in cost of energy (3.1 percent vs -5.4 percent in 2016). Also, food prices rose 3 percent (vs 0.8 percent in 2016) and services advanced 1.4 percent (vs 1.3 percent).


German December Inflation Rate Confirmed at 1.7%


Destatis l Rida Husna | rida@tradingeconomics.com
1/16/2018 11:45:18 AM