Germany Inflation Confirmed at 5-Month Low


Consumer prices in Germany increased 0.2 percent in July of 2015, easing from a 0.3 percent rise in the previous month and matching preliminary estimates. It is the lowest inflation rate since February, due to further decline in energy prices and a slowdown in cost of food.

Year-on-year, energy cost (total) decreased by 6.2 percent, following a 5.9 percent drop in the preceding month. Prices were down for: heating oil (-22.4 percent), motor fuels (-7.1 percent), central and district heating (-5.9 percent) and electricity (-1.0 percent). In contrast, cost of solid fuels increased by 1.1 percent.

Cost of food and non-alcoholic beverages increased by 0.4 percent, after registering a 1.0 percent rise in June. Prices rose markedly for fruits (+6.1 percent), vegetables (+3.9 percent), fish and fish products (+2.5 percent) and confectionery (+2.2 percent). Prices were considerably down for dairy products (-6.2 percent), edible fats and oils (-4.9 percent) and meat and meat products (-0.7 percent).

Cost of goods as a whole fell by 0.7 percent, following a 0.5 percent drop in June. Cost of services rose 1.1 percent in July, after registering a 0.9 percent rise in the preceding month. Among goods, lower prices were recorded for telephone (-7.9 percent), consumer electronics (-5.2 percent) and information processing equipment (–2.3 percent). Consumers had to pay more for coffee, tea and cocoa (+4.5 percent), newspapers and periodicals (+6.3 percent), tobacco products (+5.6 percent). Among services, higher cost were seen for net rents exclusive of heating expenses (+1.2 percent), passenger transport (of which taxi ride +12.9 percent), hairdresser services and other services for personal care (+3.4 percent) and catering services in restaurants, cafes  (+3.0 percent). In contrast, cost of services declined for air tickets (-5.0 percent) and other services (-6.2 percent, largely due to a legal amendment regarding real estate agencies, which took effect in June, 1, 2015).

On a monthly basis, consumer prices rose 0.2 percent in July, following a 0.1 percent drop in June. Prices increases were seen for package holidays (+16.0 percent) and motor fuels (+0.5 percent). In contrast, price declined for household energy (-1.0 percent), food (-0.7 percent, with cost of fruit dropping by 3.6 percent and vegetables by 2.2 percent).

The harmonized index of consumer  prices (HICP) increased by 0.1 percent in July of 2015 over the same month last year. Compared with the previous month, the index rose by 0.3 percent.

Germany Inflation Confirmed at 5-Month Low


Destatis l Rida Husna l rida@tradingeconomics.com
8/13/2015 12:53:09 PM