Germany: Harmonized inflation ticks up in June
July 11, 2019
Harmonized consumer prices increased 0.3% month-on-month, matching May’s print. The June’s result was mainly attributable to a sharp jump in recreation and culture prices; all other components saw cheaper prices or softer price growth from May. Clothing and footwear became noticeably cheaper while transportation costs also dropped, owing to a notable fall in oil prices.
Harmonized inflation, meanwhile, ticked up to 1.5% in June from 1.3% in May and annual average harmonized inflation was stable at May’s 1.9% in June. Lastly, consumer price inflation came in at 1.6% in June, up from 1.4% in May while annual average consumer price inflation edged down to 1.7% from 1.8% in May.
Commenting on the result, Carsten Brzeski, chief economist at ING Germany, stated that “the strong fluctuation of leisure costs as a result of the timing of vacation and public holidays has been one of the main drivers of German headline inflation in recent months. It almost looks as if the country has become a leisure republic, given the sensitivity of headline inflation to just one single component.”
Author: Jan Lammersen, Economist