German Inflation Slowdown Confirmed in January


In January of 2014, Germany’s annual inflation rate slowed to 1.3 percent from 1.4 percent in the previous month, mainly due to the downward price trend for mineral oil products. Not considering the mineral oil prices, the inflation rate would have been 1.7 percent.

Year-on-year, upward pressures came from electricity (+2.5 percent) and solid fuels (+2.4 percent) compared with a year earlier. The prices of energy in general (household energy and motor fuels) were down 1.8 percent in January 2014 on January 2013. 

The rise in food prices (+3.6 percent) was again markedly higher than the overall inflation rate. Consumers had to pay more than a year earlier especially for edible fats and oils (+11.7 percent) and dairy products (+10.6 percent). Prices were markedly up also for vegetables (+5.7 percent) and fruit (+3.8 percent). A slight price decrease was observed for eggs (−1.5 percent). 

Prices of goods rose by 0.8 percent in January 2014 compared with January 2013. Here, prices were markedly up not only for food but also, for example, for newspapers, books and stationery (+4.9 percent) and tobacco products (+4.7 percent) and beer (+4.4 percent). Apart from energy, prices were also down, for example, for coffee (−5.2 percent) and information processing equipment (−5.7 percent). 

Prices of services in general rose by 1.9 percent yoy, mainly due to the rise in net rents exclusive of heating expenses (+1.5 percent). For the first time, the abolishment of the medical consultation charge on 1 January 2013 had no effect on the inflation rates.  

On a monthly basis, prices fell 0.6 percent in January mainly due to seasonal factors. Especially package holiday prices (–17.3 percent) and prices of air tickets (–4.1 percent) were lower than in the vacation month of December. As shops gave discounts on winter goods, prices were also down on the preceding month for clothing (–4.8 percent) and footwear (-3.3 percent). Energy prices fell 0.7 percent.  Prices of food in general were up 0.7 percent.  

German Inflation Slowdown Confirmed in January


DESTATIS | Joana Taborda | joana.taborda@tradingeconomics.com
2/13/2014 10:06:13 AM