German Inflation Rate Confirmed Highest In 3-1/2 Years


Consumer prices in Germany rose 1.9 percent year-on-year in January of 2017, compared to a 1.7 percent rise in December and matching preliminary estimates. It was the highest inflation rate since July 2013, mainly driven by a a faster rise in prices of food and energy while cost of services increased further.

Year-on-year, energy cost (total) increased by 5.9 percent, following a 2.5 percent rise in december. Prices were up sharply for mineral oil products (18.1 percent, of which heating oil: +42.5 percent; motor fuels: +12.8 percent). Prices also went up for electricity (1.4 percent). In contrast, cost fell for central and district heating: -5.7 percent and gas prices: -3.3  percent.

Prices of food and non-alcoholic beverages went up 3.0 percent, after gaining 2.3 percent in the previous month. Prices increased markedly for edible fats and cooking oils (12.8 percent, including butter: 26.2 percent and plove oil: 5.3 percent) and vegetables (10.7 percent). Also, prices were higher for fish and fish products (+3.3 percent, including cucumber: 69.5 percent  and butterhead lettuce or iceberg salad: +59.2 percent), fruits (4.6 percent), dairy products and eggs (+2.7 percent) and bread and cereals (+0.4 percent).

Cost of goods as a whole rose 2.7 percent, following a 1.8 percent rise in the preceding month, mainly due to newspapers and periodicals (4.2 percent) and tobacco products (3.2 percent). In contrast, a decline was recorded for some goods consumer electronics (–4.6 percent). Cost of services rose 1.2 percent in January, following a 1.5 percent gain in the previous month. Among services, cost went up for: net rents exclusive of heating expenses (1.6 percent), catering services in restaurants, cafes and the like (1.9 percent) and insurance services (2.5 percent). In contrast, prices dropped for elecommunications services (−1.1 percent) and social facilities (-6.3 percent).

On a monthly basis, consumer prices declined by 0.6 percent, after gaining 0.7 percent in the prior month and in line with consensus. It was the first drop since April 2016, as cost decreased for: social facilities (-9.1 percent), package holiday prices (–19.6 percent), air travels (-3.9 percent), clothing (-5.7 percent) and footwear (-3.7 percent). In contrast, prices went up for: food (0.7 percent) and energy (0.9 percent)

The harmonized index of consumer prices (HICP) rose 1.9 percent from a year earlier, following a 1.7 percent rise in December. On a month-on-month basis, the index remained declined by 0.8 percent, compared to a 1.0 percent rise in the preceding month and in line with market expectations.

German Inflation Rate Confirmed Highest In 3-1/2 Years


Destatis l Rida Husna | rida@tradingeconomics.com
2/14/2017 8:52:22 AM