German Inflation Rate Confirmed At Highest Level In 4-1/2 Years


Consumer prices in Germany rose 2.2 percent year-on-year in February of 2017, compared to a 1.9 percent gain in January and in line with the preliminary estimate. It was the highest inflation rate since August 2012, mainly driven by faster increases in cost of energy and food.

Year-on-year, cost of goods as a whole rose 3.2 percent, following a 2.7 percent rise in the preceding month, mainly due to the rise in energy and food prices.

Energy prices as a whole increased by 7.2 percent in February, following a 5.9 percent rise in January. Prices went up sharply for heating oil (43.8 percent), followed by motor fuels (15.6 percent) and electricity (1.6 percent). By contrast, cost fell for charges for central and district heating (-4.7 percent) and gas (-3.2  percent). Excluding energy prices, the inflation rate would have been 1.7 percent; and excluding the prices of mineral oil products, it would have been only 1.5 percent.

Prices of food and non-alcoholic beverages rose 4.1 percent, after gaining 3.0 percent in the previous month. Prices increased markedly for: vegetables (21 percent), edible fats and oils (13.2 percent), fish and fish products (5.4 percent) and fruits (3.9 percent).

Also, significant price increases were also recorded for other goods such as newspapers and periodicals (4.5 percent) and tobacco products (3.2 percent). By contrast, a decline was recorded for consumer electronics (–4.7 percent) and clothing (−0.5 percent). Cost of services went up 1.3 percent in February, following a 1.2 percent gain in the prior month. 

Cost of services went up 1.3 percent in February, following a 1.2 percent gain in the prior month, mainly due to the increase in net rents exclusive of heating expenses (1.6 percent). In addition, price increases were observed for catering services (2 percent) and insurance services (2.4 percent), while cost fell for services of social facilities (−6.1 percent), air tickets (−3 percent) and telecommunication services (−1.1 percent).

On a monthly basis, consumer prices rose 0.6 percent, after falling 0.6 percent in the prior month and in line with the preliminary reading, mainly due to seasonal factors. Prices for vegetables jumped 12.2 percent, especially for fresh vegetables like butterhead lettuce or iceberg salad (44.1 percent), peppers (35.1 percent) and tomatoes (25.8 percent).

The harmonised index of consumer prices rose by 2.2 percent from the previous year and by 0.7 percent month-over-month.


German Inflation Rate Confirmed At Highest Level In 4-1/2 Years


Destatis l Rida Husna | rida@tradingeconomics.com
3/14/2017 9:26:27 AM