German Consumer Prices Fell in October, Energy Leads Fall
German consumer prices fell in October, confirming preliminary data, German statistics agency Destatis said Thursday.
Year-on-year, consumer prices fell 0.2% measured by national standards and declined 0.5% on EU-harmonized standards. Both figures were in line with the forecasts of economists polled by The Wall Street Journal.
This was the third time this year that the inflation rate was slightly negative year-on-year. A lower rate of inflation was last measured in January 2015, Destatis said.
Among others things, the inflation rate has been influenced by the value-added-tax reduction that came into effect at the beginning of July, the report said. “Since then, it has had a downward effect on the consumer prices compared with a year earlier,” the statistics office said.
Consumer prices increased 0.1% on month by national standards, and remained flat in EU-harmonized standards, confirming the forecasts of economists polled by The Wall Street Journal.
Prices of goods fell 1.5% year-on-year, mainly as a result of a 6.8% price decline for energy products in October. Excluding energy-product prices, the inflation rate would have been 0.6% in October, Destatis said.
Food prices, however, rose 1.4% compared with a year earlier, Destatis said. There were above-average price increases for fruit and for meat and meat products.
Other goods posted price decreases, particularly durable goods such as telephones or electronic products.
Services prices rose 1.0% on year in October, driven by the increase in net rents due to heating expenses, which have been unaffected by the VAT cut.
In contrast, prices of long-distance transport tickets fell 17.1%. This was largely due to the reduction in VAT on long-distance rail tickets, from 19% to 7%, that took effect at the beginning of the year, Destatis said.
Write to Maria Martinez at [email protected]
Source: Dow Jones