German Inflation Rate Confirmed At 1.6% In June


German consumer prices rose 1.6 percent year-on-year in June of 2017, matching the preliminary estimate and following a 1.5 percent rise in the previous month. Prices increased at a faster pace for food and services while cost of energy showed no growth.

Year-on-year, cost of services went up 1.7 percent in June, following a 1.2 percent gain in the prior month. Prices rose mainly for: net rents exclusive of heating expenses (1.8 percent); package holidays (5.6 percent); and maintenance and repair of vehicles (3.3 percent). In contrast, cost of services of social facilities fell (−7.0 percent).

Goods inflation slowed to 1.5 percent from 1.8 percent in the prior month, as cost of energy was unchanged while food prices rose further.

Energy prices showed no growth from the previous year in June, following a 2.0 percent rise in May. A rise in prices of electricity (1.5 percent), heating oil (0.9 percent) and motor fuels (0.2 percent) was offset by a fall in cost of gas (-3.2 percent) and central and distric heating (-1.1 percent). Excluding energy, the inflation rate would have been 1.8 percent in June; excluding mineral oil products, it would have been 1.6 percent.

Prices of food and non-alcoholic beverages rose 2.6 percent, after a 2.3 percent rise a month earlier. Prices increased markedly for: edible fats and oils (25.9 percent), especially butter (+59.5 percenr); dairy products (13.2 percent); fish and fish products (3.4 percent); and meat and meat products (1.8 percent).

On a monthly basis, consumer prices increased by 0.2 percent, in line with the flash estimate and following a 0.2 percent drop in May. Marked seasonal price increases on the previous month were recorded for package holidays (13 percent) and air tickets (4.8 percent). By contrast, prices of energy declined by 0.8 percent and cost of food edged down 0.1 percent.

The harmonised index of consumer prices rose 1.5 percent from the previous year, slightly faster than a 1.4 percent rise in the previous month and in line with flash estimates. Compared to a month earlier, the index rose 0.2 percent.

Destatis l Rida Husna | rida@tradingeconomics.com
7/13/2017 10:47:00 AM