German consumer price growth slowed less than forecast in April

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 +0.9% in April 2020. This means that the inflation rate was down again (March 2020: +1.4%; February 2020: +1.7%). Economists had expected a 0.8% increase in April.

The prices of goods (total) increased by 0.3% between April 2019 and April 2020, which was below average. This was mainly due to a 5.8% decline in energy product prices. While the prices of mineral oil products recorded a decline, some other prices went up, for instance, electricity prices (+4.4%). Food prices also climbed substantially (+4.8%). The effects of the corona crisis were reflected especially by increasing fruit (+11.0%) and vegetable prices (+6.5%).

The prices of services (total) increased above average in April 2020 on the same month a year earlier (+1.3%). A major factor contributing to the development of service prices 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 March 2020, the overall consumer price index was up 0.4% in April 2020. Economists had expected a 0.3% increase. The increasing food prices (+1.1%) are worth mentioning in this context. Compared with the previous month, consumers paid more especially for vegetables (+5.1%). However, the prices of energy products were down (-3.0%); above all motor fuels became less expensive (-8.3%).