Germany Inflation Confirmed at 3-Month Low in June


Consumer prices in Germany increased 0.3 percent in June of 2015, easing from a 0.7 percent increase in the previous month and matching preliminary estimates. It is the lowest inflation figure since March this year, due to a further decline of energy prices and a slowdown in cost of food and services.

Year-on-year, energy cost (total) decreased by 5.9 percent, following a 5.0 percent drop in the preceding month. Prices were down for: heating oil (-19.2 percent), motor fuels (-7.8 percent, including diesel fuel: -11.0 percent, supergrade petrol: -6.3 percent). The prices of other energy products also declined (charges for central and district heating: –5.2 percent; electricity: –0.9 percent). In contrast, prices of solid fuels increased by 1.1 percent as compared to a previous year.

Cost of food and non-alcoholic beverages increased by 1.0 percent, after registering a 1.4 percent rise in May. Prices rose markedly for fruits (+7.3 percent), vegetables (+5.0 percent). Prices rose also for confectionery (+3.2 percent), fish and fish products (+2.2 percent) and bread and cereals (+1.7 percent). Prices were considerably down for dairy products (–5.5 percent), edible fats and oils (–5.7 percent) and meat and meat products (-0.4 percent).

Cost of goods as a whole fell by 0.5 percent in June while cost of services slowed to 0.9 percent. Among goods, lower prices were recorded for telephone (-7.6 percent), consumer electronics (-5.2 percent) and information processing equipment (–2.9 percent). Consumers had to pay higher prices than a year earlier, for coffee, tea and cocoa (+10.1 percent), newspapers and periodicals (+6.0 percent), tobacco products (+4.4 percent) and beer (+3.0 percent). Among services, higher cost were seen for net rents exclusive of heating expenses (+1.2 percent), passenger transport (of which taxi ride +12.6 percent), hairdresser services and other services for personal care (+3.4 percent) and catering services in restaurants, cafes and the like (+3.1 percent). In contrast, cost of services declined for package holidays (-4.0 percent), air tickets (-1.9 percent), telecommunication services (-1.3 percent) and other services (-6.3 percent, largely due to a legal amendment regarding real estate agencies, which took effect in June, 1, 2015).

On a monthly basis, consumer prices dropped 0.1 percent in June. Prices decreases were seen for energy (-0.5 percent, including  heating oil prices (–2.6 percent), motor fuels (–0.3 percent, including diesel fuel: –2.0 percent; but supergrade petrol: +0.4 percent).  Prices of food also declined, especially for vegetables (–3.5 percent) and edible fats and oils (–1.9 percent). In contrast, prices rose for :health (+0.1 percent), recreation and culture (+0.5 percent) and restaurants and hotels (+0.4 percent).

The harmonized index of consumer  prices (HICP) increased by 0.1 percent in June of 2015 over the same month last year. Compared with the previous month, the index dropped by 0.2 percent.

Germany Inflation Confirmed at 3-Month Low in June


Destatis l Rida Husna l rida@tradingeconomics.com
7/14/2015 7:55:10 AM