Germany Inflation Rate Down to 1.7 Percent in January


Consumer prices in Germany rose by 1.7 percent in January 2013 compared with January 2012, so the general rise in prices slowed down. In December 2012, the inflation rate as measured by the consumer price index amounted to +2.0 percent. A rate of price increase of +1.7 percent was last measured in June 2012.

Compared with December 2012, the consumer price index fell by 0.5 percent. The Federal Statistical Office (Destatis) thus confirms its provisional result of 31 January 2013. The inflation rate continued to be influenced mainly by higher food and energy prices in January 2013. These two areas accounted for more than half of the entire price increase on the previous year.

Food prices rose 4.5 percent in January 2013 compared with January 2012. Consumers had to pay much more for vegetables (+8.6 percent) and fruit (+7.9 percent) than one year earlier. Prices of meat and meat products (+6.4 percent) and fish and fish products (+5.1 percent) were also considerably higher than in January 2012, while less had to be paid for edible oils and fats (−3.5 percent). Energy prices went up 3.9 percent over the same period (of which household energy: +5.8 percent; motor fuels: +0.5 percent) and thus rose less markedly again than food prices. In the household energy category, electricity prices showed a notable increase (+12.1 percent) in a year-on-year comparison.
 
Total service prices rose by 1.1 percent in January 2013 compared with January 2012. For instance, there were price increases with regard to package holidays (+5.4 percent), insurance services (+1.8 percent) and net rent exclusive of heating expenses (+1.2 percent). In contrast, prices decreases were recorded not only for health (−3.6 percent) as a consequence of the abolished medical consultation charge but also for financial services (−11.2 percent). The price development remained consumer-friendly also in the sphere of communication (−1.7 percent; including telecommunications services: −1.8 percent). 
 
Compared with December 2012, the consumer price index fell by 0.5 percent in January 2013. The decline in prices on the preceding month was partly due to the abolished quarterly standard medical consultation charge mentioned above. There also were price drops typical of the season: package holiday prices (–17.7 percent) and prices of air tickets (–3.6 percent) were notably lower than in the vacation month of December. As shops started giving discounts on winter goods, the prices of clothing were also markedly down on the preceding month (–6.6 percent).
 

Destatis | Nuno Fontes | nuno@tradingeconomics.com
2/20/2013 9:03:31 AM