German consumer price inflation accelerates further year-on-year in January

German consumer price inflation accelerates further in January. The country’s headline inflation rose 1.9 percent year-on-year in January 2017. It rose to the highest level in four years, affirming the flash estimate. In December, Germany’s consumer price had risen 1.7 percent year-on-year. On a sequential basis, the headline inflation dropped 0.6 percent in January, thus confirming the provisional overall results.

The consumer prices have been upwardly impacted by the development of energy prices since December 2016. Energy prices as a whole were up noticeably in January 2017 as compared with a year ago. It rose 5.9 percent year-on-year. The year-on-year rise in process was significantly higher than in December 2016 when the relevant pace of price rise had been 2.5 percent.

A particularly strong fall was however seen in charges for central and district heating and gas prices. Stripping energy prices, German inflation rate would have been 1.5 percent in January; whereas excluding the mineral oil products prices, inflation would have been 1.3 percent.

Food inflation was also higher on a year-on-year basis in January, as compared to the same month last year. Food prices accelerated 3.2 percent. Compared with the overall inflation rate, the goods prices as a whole, including energy and food, recorded an above-average year-on-year rise of 2.7 percent. Individual goods were notably up on a year-on-year basis.

Meanwhile, seasonal factor was the main reason for the 0.6 percent decline in sequential rate of inflation in January. But prices food was up in January on a sequential basis. Also, energy prices also rose on a sequential basis by 0.9 percent.

The EU gauge of inflation, HICP, rose 1.9 percent year-on-year in January, as compared with the 1.7 percent recorded in December. On a sequential basis, the HICP dropped 0.8 percent in the month, reversing the 1 percent rise seen in December.