German August Inflation Rate Confirmed at 1.8%


German consumer prices rose by 1.8 percent year-on-year in August of 2017, matching the preliminary estimate and following a 1.7 percent gain in the previous month. It was the highest inflation rate since April, as cost of energy and food went up at a faster pace.

Year-on-year, prices of goods rose 2.0 percent, faster than a 1.7 percent rise in July, due to rising prices of energy and food. Prices also rose for newspapers and periodicals, tobacco products and pharmaceutical products.

Energy prices were up 2.3 percent, much faster to a 0.9 percent rise in a month earlier. Prices increased for: mineral oil products (5.2 percent), of which heating oil (10.4 percent) and motor fuels (3.9 percent); and electricity (2.0 percent). In contrast, gas prices were down by 2.9 percent. 

Food and non-alcoholic beverages rose 2.8 percent, following a 2.6 percent increase in the prior month. Prices went up for: edible fats and oils (28.1 percent), especially butter (59.7 percent); fish and fish products (3.3 percent); and meat and meat products (2.6 percent).

Cost of services went up 1.6 percent from a year ago, easing slightly from a 1.7 percent rise in July. Prices rose mainly for: net rents exclusive of heating expenses (1.7 percent); maintenance and repair of vehicles (3.5 percent); in-patient health services (3.5 percent); and catering services (2.4 percent). In contrast, cost fell for: services of social facilities (-7.2 percent), telecommunication services (-0.8 percent) and for pre-primary and primary education services (-0.2 percent).

On a monthly basis, consumer prices increased by 0.1 percent, in line with the flash estimate and following a 0.4 percent rise in July. Prices of energy were up 0.5 percent, of which heating oil (1.9 percent) and motor fuels (0.9 percent). Also, cost of clothing increased by 3.4 percent, because the autumn/winter collection has started to arrive. Also, there was a notable 12.0 percent price increase for animal services due to the modification of the statutory schedule of veterinarians' fees. On the other hand, food prices fell 0.2 percent, mainly due to vegetables (-2.2 percent).

The harmonised index of consumer prices rose 1.8 percent from the previous year, following a 1.5 percent gain in a month earlier and matching the preliminary estimate. Compared to a month earlier, the index rose 0.2 percent.

Destatis l Rida Husna | rida@tradingeconomics.com
9/13/2017 11:34:36 AM