German consumer price growth accelerated in July

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 +3.8% in July 2021. The inflation rate has thus surged; in June 2021 it had been +2.3%. A higher inflation rate than in July 2021 was last measured in December 1993 (+4.3%). Destatis also reports that consumer prices were up 0.9% on June 2021.

The prices of goods (total) increased by 5.4% between July 2020 and July 2021, which was above average. Especially the increase in Energy product prices (+11.6%) was markedly higher than overall inflation. The price increase for such products accelerated again (June 2021: +9.4%). In addition to the price trend of a year ago (base effect) and the CO2 charge introduced at the beginning of the year, the increasing inflation rate was also attributable to the current rise in energy prices. 

Food prices in July 2021 were up 4.3% on the same month a year earlier, following +1.2% in June 2021. Marked price increases on July 2020 were recorded, for example, for vegetables (+7.2%) and edible fats and oils (+6.9%). 

The year-on-year increases in energy product prices and food prices had a clear upward effect on the inflation rate. Excluding energy prices, the inflation rate would have been just +2.9% in July 2021; excluding the prices of both product groups, it would have been +2.7%. The prices of services (total) increased by 2.2% in July 2021 compared with the same month a year earlier. 

Compared with June 2021, the consumer price index rose by 0.9% in July 2021. Energy product prices were up 1.3%, especially the prices of heating oil (+3.0%) and motor fuels (+2.6%). The prices of food (total) rose by 0.4%. Prices of vegetables, for example, increased (+1.1%), whereas prices of fruit were down (-1.2%). The prices of clothing and footwear were also down (-2.4%), which was mainly due to seasonal reductions in the prices of summer articles.