German July Inflation Rate Confirmed at 1.7%


The inflation rate in Germany was confirmed at 1.7 percent year-on-year in July 2019, up from 1.6 percent in the previous month, as food prices increased faster while both energy and services inflation eased.

Goods prices increased 1.8 percent in July, faster than 1.5 percent in the prior month, as a pickup in food inflation offset slowdown in energy inflation. Gains were also recorded for other goods such as newspapers and periodicals (5.0 percent), clothing (3.8 percent), and tobacco products (3.2 percent). However, prices were down for some goods such as telephones (-8.1 percent) and consumer electronics (-4.5 percent).

Food costs increased 2.1 percent, compared to 1.2 percent in June, as vegetable prices increased substantially (11.0 percent). Price rises were also recorded for fish, fish products and seafood (3.6 percent), meat and meat products (3.6 percent). Conversely, prices dropped considerably for edible fats and oils (-10.1 percent) and fruit (-4.5 percent).

Meanwhile, energy inflation eased to 2.4 percent from 2.5 percent in June. There were increases in prices of district heating (4.8 percent), natural gas (4.4 percent), electricity (3.8 percent), and motor fuels (0.2 percent), while heating oil prices declined 0.5 percent.
 
Services prices rose 1.5 percent in July, slower than 1.9 percent in June. This was mainly attributable to the increase in net rents exclusive of heating expanses (1.4 percent), as household spend a large part of their consumption expenditure on this item. Also, price increases were observed for services of social facilities (5.5 percent), maintenance and repair of vehicles (4.7 percent) and catering services in restaurants, cafes and the like (2.8 percent). By contrast, an unusually large price decrease was recorded for pre-primary education services (-12.5 percent), which was due especially to the reduction of childcare costs in some Länder.
  
On a monthly basis, the consumer price index rose 0.5 percent in July, accelerating from a 0.3 percent gain in June. Prices were up especially for package holidays (15.1 percent) and air tickets (6.1 percent). A considerable price increase was recorded for letter services (10.6 percent), which is due to the new postage for letters and postcards that has been applicable since 1 July 2019. Food prices increased 0.4 percent, while energy prices were slightly down (-0.2 percent). Decreases in motor fuel prices (-1.1 percent) were contrasted by increases in heating oil prices (2.2 percent). Consumers benefited from markedly lower prices of clothing and footwear (-3.4 percent). This development was mainly due to seasonal price reductions for summer articles.
 
The harmonised index of consumer prices advanced 1.1 percent from the previous year (vs 1.5 percent in June); and 0.4 percent month-over-month (vs 0.3 percent in June).

German July Inflation Rate Confirmed at 1.7%


Federal Statistical Office | Chusnul Ch Manan | chusnul@tradingeconomics.com
8/13/2019 12:00:33 PM