Germany: Inflation edges down in July

In July, German consumer prices rose 0.3% over the previous month, up from a 0.1% increase in June, according to data released by the Federal Statistics Office (Destatis) on 14 August. The print was driven by seasonal factors, with significant increases in the prices for package holidays and airline tickets. This offset markedly lower prices for clothing and footwear, as stores ran their seasonal discounts. Furthermore, prices for food and energy also registered declines in July over June.

Inflation eased to 2.0% in July, marginally down from 2.1% in June, and marked the second consecutive moderation after registering an over one-year high in May. Meanwhile, annual average inflation was 1.7% for the third consecutive month. Lastly, harmonized inflation (HICP) was also stable in July, coming in at 2.1%.

Germany Inflation Forecast

The Central Bank expects HICP inflation of 1.8% in 2018 and 1.7% in 2019. FocusEconomics panelists see CPI inflation averaging 1.8% in 2018, which is unchanged from last month’s forecast. For 2019, our panel expects average inflation to remain at 1.8%.