German Inflation Rate Confirmed at 1-1/2-Year Low

The inflation rate in Germany was confirmed at 1.1 percent year-on-year in October 2019, down from 1.2 percent in the previous month. This was the lowest rate since February 2018, as energy deflation deepened while food and services prices increased at a softer pace.
Federal Statistical Office | Chusnul Ch Manan | chusnul@tradingeconomics.com 11/13/2019 10:29:23 AM
Goods prices rose 0.4 percent in October (vs 0.6 percent in September) mainly due to a fall in energy prices (-2.1 percent vs -1.1 percent) and a slowdown in food inflation (1.1 percent vs 1.3 percent). Meantime, prices were markedly up for newspapers and periodicals (5.1 percent) and tobacco products (4.1 percent). However, prices of other goods were down, in particular those of mineral oil products (-9.1 percent), information processing equipment (-7.1 percent), consumer electronics (-5.4 percent) and telephones (-5.1 percent).
 
Energy prices fell due to decreases in prices of heating oil (-15.8 percent) and motor fuels (-7.5 percent), while costs increased for natural gas (5.1 percent) and electricity (3.9 percent).
 
Food cost rose as prices were markedly higher particularly for meat and meat products (4.9 percent), fish, fish products and seafood (3.3 percent), as well as bread and cereals (2.6 percent). In contrast, prices dropped for edible fats and oils (-11.6 percent) and vegetables (-2.8 percent).

Services inflation slowed to 1.7 percent in October from 1.8 percent in the previous month. This was mainly attributable to the increase in net rents exclusive of heating expenses (1.4 percent, the same as in September), as household spend a large part of their consumption expenditure on this item. Also, price increases were observed for services of social facilities (5.2 percent), maintenance and repair of vehicles (5.0 percent), hairdresser service and other services for personal care (3.0 percent), catering services in restaurants, cafes and the like (2.8 percent). By contrast, prices of telecommunication services fell 0.5 percent.

On a monthly basis, consumer prices inched 0.1 percent higher, after being unchanged in September, as prices increased for both footwear (2.3 percent) and clothing (0.9 percent). Meanwhile, energy cost dropped 0.1 percent, especially heating oil (-0.8 percent), and food prices were down 0.4 percent due to vegetables (-3.8 percent).
  
The harmonised index of consumer prices rose by 0.9 percent from the previous year, the same pace as in September; and by 0.1 percent month-over-month (vs -0.1 percent in September).

German Inflation Rate Confirmed at 1-1/2-Year Low