German Inflation Rate Confirmed at 0.3% in June


Consumer prices in Germany rose 0.3 percent year-on-year in June of 2016, following a 0.1 percent rise in May and matching preliminary estimates. While cost of energy fell at a slower pace, cost of services rose further.

Year-on-year, energy cost (total) decreased by 6.4 percent, following a 7.9 percent drop in May. Prices were down the most for: heating oil (-19.0 percent), motor fuels (-9.4 percent). Charges also fell for central and district heating (-9.1 percent) and gas (-2.8 percent). In contrast, cost of electricity rose 0.9 percent. 

Cost of food and non-alcoholic beverages rose 0.1 percent, after remaining unchanged in the previous month. Prices went up for vegetables (+4.6 percent, including potatoes: +19.1 percent), fruits (+2.6 percent) and fish and fish products (+3.2 percent). In contrast, prices were down for dairy products (incuding curd: -16.3 percent; UHT milk: -11.0 percent; sliced cheese: -8.2 percent) and edible oils and fats (-4.5 percent,  especially butter: –11.7 percent).

Cost of goods as a whole fell by 0.8 percent, following a 0.9 percent drop in the preceding month. Cost of services rose 1.4 percent in June from 1.2 percent in a month earlier. Among goods, lower prices were recorded for coffee, tea  and cocoa (-3.7 percent, including unground coffee: -5.4 percent). In contrast, prices rose for newspapers and periodicals (+4.3 percent), tobacco products (+4.6 percent) and jewelry, clocks and watches (+5.8 percent). Among services, higher cost were seen for net rents exclusive of heating expenses (+1.1 percent), social facilities (+3.8 percent), insurance services (+2.3 percent) and transport services (+1.8 percent). In contrast, prices were down for  telecommunication services (-1.6 percent).

On a monthly basis, consumer prices rose 0.1 percent, following a 0.3 percent increase in May and in line with expectations. Energy prices rose 1.2 percent, slowing from 1.6 percent in the preceding month. Prices went up both for heating oil (+5.2 percent) and motor fuels (+2.7 percent, including supergrade petrol: +2.6 percent, diesel fuel: +3.6 percent). Prices of package holidays also up by 4.3 percent, including those to foreign destinations: +4.6 percent. In contrast, prices fell by 0.4 percent for food with price decreases  were recorded especially for vegetables (-1.8 percent) and dairy products and eggs (−1.6 percent). Noticeable month-on-month price decreases were also observed for clothing (-4.1 percent).

The harmonized index of consumer prices (HICP) rose 0.2 percent from a year earlier after remaining unchanged in May. On a month-on-month basis, the index rose 0.1 percent, slowing from 0.4 percent in the preceding month.

German Inflation Rate Confirmed at 0.3% in June


Destatis l Rida Husna | rida@tradingeconomics.com
7/12/2016 7:49:42 AM