Germany's consumer price index fell in line with forecasts in November

According to the report from the Federal Statistical Office (Destatis), the inflation rate in Germany, measured as the year-on-year change in the consumer price index, stood at -0.3% in November 2020. This was the fourth time this year that the inflation rate was negative. The price decrease even accelerated slightly (October: -0.2%). The last time an inflation rate as low as this was observed was in January 2015. Destatis also reports that consumer prices decreased markedly by 0.8% compared with October 2020.

One of the reasons for the negative inflation rate was again the temporary value added tax reduction, which was implemented on 1 July 2020 as a measure of the Federal Government's stimulus package. Since then, it has had a downward effect on the consumer prices compared with a year earlier.

The prices of goods (total) fell 1.8% from November 2019 to November 2020. This was mainly due to price decreases for energy products (-7.7%). The decrease in energy prices thus accelerated (October 2020: -6.8%). Excluding energy product prices, the inflation rate would have been +0.6% in November 2020.

The prices of services (total) were up 1.1% in November 2020 on the same month of the previous year. A major factor contributing to this price development was the increase in net rents exclusive of heating expenses (+1.4%), as households spend a large part of their consumption expenditure on this item.

Compared with October 2020, the overall consumer price index fell markedly by 0.8% in November 2020. Consumers paid less especially for motor fuels (-2.8%, including supergrade petrol: -3.7%). Prices of energy products (total) fell by 1.0%. Food prices, however, rose 0.5% in November 2020. Seasonal month-on-month price increases were recorded especially for vegetables (+3.0%).