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

The Federal Statistical Office (Destatis) said that the inflation rate in Germany, measured as the year-on-year change in the consumer price index, stood at +2.0% in April 2021. The inflation rate increased for the fourth month in a row after the temporary reduction of the value added tax rates had ended. That level was last recorded in April 2019. Destatis also reports that consumer prices were up 0.7% compared with March 2021.

The prices of goods (total) increased by 2.6% between April 2020 and April 2021. Energy product prices were 7.9% higher than a year earlier, after +4.8% in March 2021. In addition to the CO2 charge introduced at the beginning of the year, the decrease in energy product prices of a year earlier had an impact on the inflation rates (base effect). Compared with a year ago, higher prices were recorded especially for motor fuels (+23.3%) and heating oil (+21.1%), while electricity prices declined slightly (-0.2%). Food prices rose by 1.9%. Higher prices than a year earlier were recorded, for example, for confectionery (+3.1%) and also dairy products and butter (+2.5%). Marked price rises were observed for plants and flowers (+7.5%), coffee products (+5.1%) and tobacco products (+4,5%). However, notable price decreases were recorded for mobile phones (-8.3%).

The year-on-year increases in energy product prices had a clear upward effect on the inflation rate. Excluding energy prices, the inflation rate would have been +1.4% in April 2021; excluding the prices of heating oil and motor fuels, it would have been only +1.2%.