German January Inflation Rate Confirmed at 11-Month Low


Germany's annual inflation rate was confirmed at 1.4 percent in January 2019, the lowest since April last year and below December's revised figure of 1.6 percent, mainly due to a slowdown in energy inflation.

Goods prices advanced 1.3 percent in January, as prices were up not only for energy and food but also, among other things, for newspapers and periodicals (4.9 percent) as well as beer and tobacco products (3 percent each). However, there were also some goods that showed price decreases as, for example, telephones (-8.3 percent), consumer electronics (-5.9 percent) and information processing equipment (-5.3 percent).

Energy prices rose 2.3 percent, easing from a 4.9 percent increase in December. Prices of electricity, gas and other fuels were up 3.3 percent and those of motor fuel rose 0.3 percent. Excluding energy prices, the inflation rate in January would have been 1.3 percent.

Food prices increased 0.8 percent, with main upward pressure coming from vegetable prices (6.3 percent), fish and fish products (2.4 percent) and bread and cereals (1.7 percent). By contrast, price decreases were recorded especially for fruit (-5.1 percent) and dairy products (-1.3 percent).

Prices of services rose 1.4 percent in January, mainly boosted by net rents exclusive of heating expenses (1.5 percent), as households spend a large part of their consumption expenditure on this item. Larger price increases were also observed for services of social facilities (4.4 percent), maintenance and repair of vehicles (3 percent) and for catering services in restaurants, cafes and the like (2.2 percent).

On a monthly basis, consumer prices fell 0.8 percent in January, after being unchanged in December, mainly due to seasonal factors. Especially package holiday prices (-24.6 percent) were lower than in the vacation month of December. Also, the prices of clothing (-6 percent) and footwear (-3.1 percent) were markedly down on the previous month, which was especially due to the discounts given on the winter collection. Energy prices also decreased on the previous month (-2 percent). In particular, prices were markedly down again for motor fuels (-7.3 percent) and heating oil (-5.2 percent). Month-on-month price increases were observed for food (0.6 percent) and especially for vegetables (2.7 percent).

The harmonised index of consumer prices increased 1.7 percent from the previous year; but declined 1 percent month-over-month.

From reference month January 2019, the index has been rebased from 2010 to base year 2015. In the process, weighting patterns have been updated and methodological changes implemented. The results for reference month January 2019 now refer to the new base year 2015. The procedure also includes a recalculation of the consumer price index for Germany from January 2015.

German January Inflation Rate Confirmed at 11-Month Low


Destatis | Rida Husna | rida@tradingeconomics.com
2/21/2019 10:42:12 AM