German consumer price inflation accelerates year-on-year in 2018 on energy prices

German consumer prices rose an average of 1.9 percent year-on-year in 2018. The Federal Statistics Office reported that the year-on-year rate of price rise in 2018 was slightly above the previous year’s rate. In December, the consumer price inflation eased noticeably on a month-on-month basis to 1.7 percent.

The year-on-year rise in 2018 was mainly driven by energy prices. Energy product prices rose 4.9 percent year-on-year, the rise being larger than a year earlier. The largest price rises in 2018 were seen in heating oil and motor fuel prices. In contrast to these sharp price rises, moderate price developments were recorded for other energy products. Stripping energy prices, the year-on-year rate of price rise in 2018 came in at 1.6 percent.

Meanwhile, food prices rose markedly by 2.5 percent in 2018 on a year-on-year basis, less strongly than energy prices. Goods prices rose 2.2 percent year-on-year. Meanwhile, rises in prices were also seen in tobacco products and alcoholic beverages. Service prices rose slightly below goods prices, coming in at 1.5 percent. Net rents exclusive of heating expenses mainly contributed to the rise in service prices.

In December, consumer prices were up 1.7 percent year-on-year, a marked deceleration from November’s 2.3 percent. The development of energy product prices mainly drove the lower inflation. Energy prices rose 4.8 percent year-on-year, markedly slowing from November’s 9.3 percent year-on-year. The price rise slowed in heating oil and motor fuels. Stripping energy prices, inflation rate come in at 1.4 percent. Food prices were up 1 percent year-on-year. Goods prices were up 2 percent year-on-year, driven by the rise in energy prices. Meanwhile, services prices rose 1.5 percent.

On a sequential basis, the consumer price index was up 0.1 percent in December. Services price rose 1.3 percent. Goods prices fell 1.1 percent, mainly due to the development of energy prices that fell 4.2 percent.

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