Germany's consumer price index rose in line with forecasts in January

According to the report from Federal Statistical Office (Destatis), the inflation rate in Germany, measured as the year-on-year change in the consumer price index, stood at 1.7% in January 2020. Destatis also reports that consumer prices decreased by 0.6% compared with December 2019.

The prices of goods (total) were up 2.0% in January 2020 from January 2019. There was a price increase especially for energy products (+3.4%) after their prices had fallen slightly in December 2019 (-0.1%). In January 2020, higher prices than a year earlier were recorded in particular for motor fuels (+5.2%) and electricity (+3.9%). The rise in food prices was also above average (+2.3%). Markedly higher prices were observed for meat (+6.2%) and fruit (+6.0%). As regards goods, there were considerable price rises also for newspapers and periodicals (+5.3%) and tobacco products (+4.4%).

Excluding energy prices, the rate of inflation would have been 1.5% in January 2020.

The prices of services (total) increased by 1.5% in January 2020 on January 2019. Higher prices for the services of car repair shops (+4.7%) and social facilities (+4.3%) should be mentioned here. Net rents exclusive of heating expenses, which are important as they account for large part of household final consumption expenditure, rose by 1.4%.

Compared with December 2019, the consumer price index fell by 0.6% in January 2020. This was due to seasonal price decreases for package holidays (-28.7%), clothing (-6.3%) and footwear (-4.0%) and to the fact that there has been a lower value added tax rate for long-distance rail tickets since 1 January 2020, which reduced the prices of long-distance train journeys by 10%.