Germany Inflation January 2019


Germany: Inflation eases in January

February 21, 2019

In January consumer prices fell 0.8% over the previous month largely on the back of seasonal effects; for instance, prices for package holidays dropped significantly, while discounts on winter goods led to cheaper footwear and shoe accessories. Meanwhile, the effects of lower oil and energy prices continued to drive consumer prices further down. On the other hand, prices for foodstuffs increased and limited the drop in consumer prices. January’s noticeable drop in consumer prices contrasts the downwardly revised flat reading in December (previously reported: +0.1% month-on-month). It should be noted that December’s revision was in part due to a revision to the consumer price index as the base year changed from 2010 to 2015, weightings were adjusted and the methodology changed slightly.

Inflation eased from a downwardly revised 1.6% in December (previously reported: 1.7%) to 1.4% in January, the lowest reading in nine months. Annual average inflation was stable at December’s 1.7% while harmonized inflation (HICP) was also stable at 1.7%.

Germany Inflation Forecast

The FocusEconomics Consensus Forecasts panelists see CPI inflation averaging 1.9% in 2019, which is unchanged from last month’s forecast. For 2020, our panel sees average inflation at 1.7%. In December, the Central Bank expected HICP inflation of 1.4% in 2019 and 1.8% in 2020.

Author:, Economist

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Germany Inflation Chart

Germany Inflation January 2019

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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