Germany: Harmonized inflation moderates noticeably in July
August 13, 2019
German harmonized consumer prices rose 0.4% month-on-month in July, up from the 0.3% rise recorded in June. July’s uptick came on the back of higher prices for food and non-alcoholic beverages, pricier alcoholic beverages and tobacco while housing-related utilities also became more expensive. On the other hand, significantly cheaper clothing and footwear limited the overall price gain.
Harmonized inflation, meanwhile, dropped to 1.1% in July from 1.5% in the prior month, while average harmonized inflation edged down from 1.9% in June to 1.8% in July. Lastly, consumer price inflation rose from 1.6% in June to 1.7% in July and annual average consumer price inflation was stable at June’s 1.7% in July.
Regarding the inflation outlook, Carsten Brzeski, chief economist at ING Germany, noted that “with negative base effects from oil prices and the cooling economic outlook, German headline inflation will, in our view, continue to fluctuate between 1% and 1.5% in the coming months, adding to the argument for new ECB action in September.”
Author: Jan Lammersen, Economist