The inflation rate in Germany was confirmed at 1.6 percent year-on-year in June 2019, up from 1.4 percent in the previous month, as both services and food prices rose at a faster pace while energy inflation eased.
Services inflation accelerated to 1.9 percent in June from 1.2 percent in May. This was mainly attributable to the increase in package holiday prices (6.1 percent). Also, price increases were observed for services of social facilities (5.2 percent), maintenance and repair of vehicles (4.7 percent) and rail tickets (3.6 percent). Another major factor contributing to the development of service prices was the increase in net rents exclusive of heating expenses (1.4 percent), as households spend a large part of their consumption expenditure on this item. In contrast, an unusually large price decrease was recorded for pre-primary education services (-12.2 percent), which was due especially to the reduction of childcare costs in some Länder.
Goods prices increased 1.5 percent in June, slower than 1.8 percent in the prior month, as a slowdown in energy inflation offset a pick up in food inflation. Gains were also recorded for other goods such as newspapers and periodicals (4.6 percent) and tobacco products (3.4 percent). However, prices were down for some goods such as telephones (-6.9 percent) and consumer electronics (-6.1 percent).
Food costs increased 1.2 percent, compared to a 0.9 percent rise in May, as vegetable prices increased substantially (9.6 percent). Price rises were also recorded for fish, fish products and seafood (3.0 percent), meat and meat products (2.8 percent), and bread and cereals (2.2 percent). In contrast, prices fell considerably for edible fats and oils (-9.3 percent) and fruit (-6.1 percent).
Meanwhile, energy inflation eased to 2.5 percent from 4.2 percent in May. The prices of district heating (5.6 percent), natural gas (4.1 percent), electricity (3.4 percent), and motor fuel (1.2 percent) were higher, while heating oil prices dropped 3.5 percent.
On a monthly basis, the consumer price index rose 0.3 percent in June, accelerating from a 0.2 percent gain in May. This was mainly due to prices of package holidays (18.6 percent). Prices were also up for air tickets (2.6 percent), including international flight (2.9 percent), rail tickets (1.6 percent) and accommodation (0.9 percent). Meantime, food prices remained nearly unchanged (0.1 percent), while energy costs were down 1.1 percent. Consumers also benefited from lower clothing and footwear prices (-1.7 percent), which was partly due to first discounts given on spring and summer articles.
The harmonised index of consumer prices went up 1.5 percent from the previous year (vs preliminary 1.3 percent and May's final 1.3 percent); and 0.3 percent month-over-month (vs preliminary 0.1 percent and May's 0.3 percent).
7/11/2019 7:35:39 AM