German August Inflation Rate Confirmed at 1.4%


The inflation rate in Germany was confirmed at 1.4 percent year-on-year in August 2019, down from 1.7 percent in the previous month. This was the lowest inflation rate since May.

Goods prices were 1.3 percent higher in August (vs 1.8 percent in July), mainly due to a slowdown in energy inflation while food costs rose faster. Also, prices were markedly up for newspapers and periodicals (5.3 percent), tobacco products (3.3 percent) and new passenger cars (2.4 percent). However, prices of other goods were down, in particular those of information processing equipment (-7.7 percent) and telephones (-7.1 percent).

Energy inflation eased to 0.6 percent in August from 2.4 percent in July. There were increases in prices of district heating (4.7 percent), natural gas (4.6 percent), and electricity (3.8 percent), while costs fell for heating oil (-5.2 percent), and motor fuels (-3.3 percent).

Food costs increased 2.7 percent, faster than a 2.1 percent rise a month earlier, amid a jump in vegetable prices (12.8 percent). Also, price rises were seen for meat and meat products (4.3 percent) and fish, fish products and seafood (4 percent). In contrast, prices dropped for edible fats and oils (-8.9 percent) and fruit (-2.6 percent).

Services prices grew 1.6 percent in August, compared to 1.5 percent in July. 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 (5.7 percent), maintenance and repair of vehicles (4.8 percent) and catering services in restaurants, cafes and the like (2.7 percent). In addition, cost of many services which are of comparatively little importance for consumption went up sharply, including coaches (18.5 percent), postal services (10.6 percent), and bank charges (4.1 percent). By contrast, prices of telecommunication services fell 0.7 percent.

On a monthly basis, the consumer price index fell 0.2 percent in August, the first monthly decline in seven months. Energy prices were down 1 percent, led by motor fuels (-2.4 percent) and heating oil (-2.0 percent). Also, there were sizeable price decreases in the education sector for pre-primary and primary education services (-3.0 percent) and for package holidays (-2.5 percent).

The harmonised index of consumer prices rose 1 percent from the previous year (vs 1.1 percent in July); but fell 0.1 percent month-over-month (vs 0.4 percent in July).

German August Inflation Rate Confirmed at 1.4%


Destatis | Rida Husna | rida@tradingeconomics.com
9/12/2019 8:57:19 AM