Germany’s inflation rate, as measured by the year-on-year change in the consumer price index (CPI), moderated to +2.3% in July 2024, down from +2.4% in May and +2.2% in June. Ruth Brand, President of the Federal Statistical Office (Destatis), attributes this decline to decreases in energy prices. “Decreases in energy prices, in particular, are having a dampening effect on the rate of inflation,” Brand noted. “By contrast, we continue to see above-average increases in service prices.”
Compared to June 2024, consumer prices increased by 0.3% in July 2024. Energy product prices fell by 1.7% year-on-year in July, improving from a 2.1% decrease in June. Household energy costs dropped significantly by 3.6%, while motor fuel prices fell by 0.4%. Lower prices were observed for firewood, wood pellets, and other solid fuels (-13.9%), electricity (-6.2%), and natural gas (-3.3%). However, certain energy products saw price increases, notably district heating (+31.0%) and heating oil (+7.7%).
Germany’s Inflation Rate Eases Slightly in July 2024 Amid Lower Energy Prices
Food prices rose by 1.3% year-on-year in July, up from a 1.1% increase in June. Despite this acceleration, food inflation remained below the overall inflation rate. Significant year-on-year price hikes were seen in edible fats and oils (+14.3%), with olive oil up by 45.0%, and sugar, jam, and confectionery (+6.1%). Prices for vegetables (+1.7%) and bread and cereals (+0.9%) also increased, while dairy products saw a decrease of 1.1%.
Excluding food and energy, the inflation rate stood at +2.9% in July, unchanged from June. This core inflation rate continues to exceed the overall inflation rate, highlighting persistent inflationary pressures in other product categories.
Goods prices increased by just 0.9% over the past year, markedly below overall inflation. Non-durable consumer goods saw a slightly higher increase (+1.1%) compared to durable goods (+0.6%). Notable price rises were observed in non-alcoholic beverages (+5.9%), tobacco products (+4.7%), and clothing (+4.0%). Durable goods prices, however, fell by 0.3%.
Service prices surged by 3.9% year-on-year, outpacing overall inflation. Significant price hikes were noted for insurance services (+13.9%), social facility services (+8.1%), and restaurant and café services (+6.7%). Other notable increases included vehicle maintenance (+5.9%), water supply services (+4.7%), and recreational services (+4.6%). Net rents, excluding heating, also contributed to the rise, with prices up by 2.2%.
Month-on-month, the consumer price index rose by 0.3% from June to July. Summer travel saw substantial price increases, including air tickets (+18.3%) and package holidays (+10.1%). Transport insurance costs also rose by 4.8%. Energy prices edged up slightly (+0.3%), with increases in district heating (+2.6%) and heating oil (+1.5%). Food prices remained nearly stable, down by 0.1%, while clothing prices decreased by 4.8% due to seasonal changes.
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