Germany Inflation

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Germany: Inflation drops to over five-year low

January 5, 2015

Consumer prices were unchanged over the previous month in December, according to data released by the Federal Statistics Office (Destatis) on 5 January. The result mirrored November’s print but came in slightly below market expectations.

Annual headline inflation fell from November’s 0.6% to 0.2% in December, the lowest inflation rate since October 2009. For the whole of 2014, inflation averaged 0.9%, which marked a 51-month low and was notably down from the 1.5% average recorded for 2013.

Meanwhile, annual HICP inflation (based on the harmonized index of consumer prices) dropped from November’s 0.5% to 0.1% in December. Annual average HICP inflation also declined in December, inching down from November’s 0.9% to 0.8%.

The Central Bank expects inflation of 1.1% in 2015, before increasing to 1.8% in 2016. FocusEconomics panelists expect inflation to average 1.0% in 2015, which is down 0.4 percentage points from the previous month’s forecast. For 2016, panelists expect inflation to increase to 1.6%.


Author: Teresa Kersting, Economist

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Germany Inflation Chart


Germany Inflation December 2014

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


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