German consumer price inflation at 1.7 pct year-on-year in July

German consumer prices came in at 1.7 percent in July on a year-on-year basis. According to the Federal Statistical Office, the consumer price index rose 0.5 percent on a sequential basis.

Energy product prices rose above average by 2.4 percent year-on-year in July and had an upward effect on the inflation rate, as had been the case in the prior month. Excluding energy prices, inflation rate came in at 1.5 percent in July. Food prices rose above average at the rate of 2.1 percent in July on a year-on-year basis. The price rise accelerated noticeably on the prior month. Vegetable prices rose substantially in July 2019 year-on-year.

The prices of goods rose 1.8 percent year-on-year. Apart from rises in energy and food prices, prices were noticeably up for newspapers and periodicals, clothing and tobacco products. Nevertheless, prices dropped for some goods such as telephones and consumer electronics.

Meanwhile, prices of services rose slightly less strongly at 1.5 percent year-on-year in July. The rise in net rents was a major factor contributing to the development of service prices. Much larger price rises were seen, for example, for services of social facilities, maintenance and repair of vehicles and for catering services in restaurants, cafes and the like.

Sequentially, the consumer price index rose 0.5 percent. In the holiday month of July, prices rose especially for package holidays and air tickets. A marked price rise was seen in letter services, which is due to the new postage of letters and postcards.

Sequentially, food prices rose 0.4 percent, whereas energy prices dropped 0.2 percent. Decreases in motor fuel prices were contrasted by rises in heating oil prices. Consumers benefitted from markedly lower prices of clothing and footwear.

Harmonized index of consumer prices rose 1.1 percent on a year-on-year basis, whereas it rose 0.4 percent on a sequential basis.