Germany's consumer price index rose in line with forecasts

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 +0.6% in May 2020. The inflation rate decreased for the third consecutive month. Destatis also reports that consumer prices fell by 0.1% compared with April 2020.

The prices of goods (total) decreased by 0.4% from May 2019 to May 2020. This was mainly due to the decline in energy product prices, which accelerated to 8.5% (April: -5.8%). As a oil price slump in the world market, which has been observed since the beginning of the year, in particular the prices of heating oil (-30.5%) and motor fuels (-20.7%) declined sharply compared with the same month a year earlier. Electricity prices, in contrast, rose by 4.2%. This was still due to the increase in the EEG surcharge at the beginning of the year. Food prices rose by an above-average 4.5% compared with May 2019. Consumers paid higher prices especially for fruit (+10.5%) and for meat and meat products (+9.2%), while the prices of edible fats and oils declined (-4.5%).

In particular, the sharply decreasing prices of energy products had a downward effect on the inflation rate. Excluding energy product prices, the inflation rate would have been much higher at +1.6% in May 2020.

Compared with April 2020, the overall consumer price index was down by 0.1% in May 2020. Energy product prices declined markedly by 1.3%, especially the prices of heating oil (-7.0%) and motor fuels (-2.4%). Fruit prices, in contrast, were up by 1.3%.