Germany Inflation January 2020


Germany: Harmonized inflation inches higher in January

February 13, 2020

German harmonized consumer prices fell 0.8% month-on-month in January, contrasting the 0.6% rise in December. The drop in the price level was driven by cheaper prices for clothing and footwear, owing to seasonal discounts; recreation and culture; education; and furnishing. On the other hand, prices for fuels jumped despite lower global oil prices.

Harmonized inflation, meanwhile, ticked up to 1.6% in January from 1.5% in the prior month, marking a nine-month high; however, annual average harmonized inflation was stable at 1.4% for the third consecutive month. Lastly, consumer price inflation rose to 1.7% in January from 1.5% in December, with annual average consumer price inflation remaining stable at 1.5% for the fourth month running.

Looking ahead, inflation is expected to remain relatively muted this year as economic activity is forecast to grow only tepidly this year as it remains caught in a dichotomy of external headwinds offsetting strong domestic metrics.

FocusEconomics Consensus Forecast panelists expect harmonized inflation to average 1.4% in 2020, which is unchanged from last month’s forecast. For 2021, our panel sees harmonized inflation averaging 1.5%. This is largely in line with the Bundesbank’s projections of harmonized inflation reaching 1.3% in 2020 and 1.6% in 2021.

Author:, Economist

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Germany Inflation Chart

Germany Inflation January 20 20

Note: Month-on-month and year-on-year changes of harmonized index of consumer prices %.
Source: Federal Statistics Office (Destatis) and FocusEconomics calculations.

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