The inflation rate in Germany, measured as the year-on-year change in the consumer price index (CPI), stood at +8.7% in January 2023.
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The revision introducing the new base year 2020 resulted in inflation rates of +8.1% for December 2020 and +8.8% for November 2020. The price increase thus accelerated at the beginning of the year.
“Following a slowdown at the end of last year, the inflation rate thus remains at a high levelâ€, says Ruth Brand, President of the Federal Statistical Office. She adds: “We are observing price rises for many goods and, to an increasing degree, also for services. Households paid higher prices in particular for energy and food also in January.â€
The Federal Statistical Office (Destatis) also reports that consumer prices in January 2023 were up 1.0% on December 2022.
Energy and food prices, in particular, have increased considerably since the war started in Ukraine and have had a substantial impact on the inflation rate. Due to the situation of war and crisis, delivery bottlenecks and price movements at upstream stages in the economic process also have an impact on the inflation rate, which in turn leads to price increases for other goods and services.
As part of the Federal Government’s third relief package, measures have been adopted to curb inflation. This is reflected in the consumer price index.
Energy product prices in January 2023 were 23.1% higher year on year despite the relief measures. In December 2022, the rate of food price increase was +20.3%. The main reason of the price increase observed in January 2023 probably was the end of the December immediate assistance.
The increase in energy prices is slowed to some extent by the electricity, natural gas and district heating price freezes. The development of energy prices is however influenced by many factors, including international purchase prices.
A particularly large increase was again recorded for household energy prices from January 2022 to January 2023 (+36.5%).
Prices rose by 51.7% for natural gas and by 26.0% for district heating. The prices of firewood, wood pellets and other solid fuels were up 49.6%, and prices of heating oil 30.6% on a year earlier. Electricity prices increased by 25.7% despite the electricity price freeze and the abolishment of the EEG surcharge. The rate of price increase for motor fuels (+7.0%) was below the overall inflation rate.
Food prices were up 20.2% in January 2023 year on year. The rate of food price increase thus was more than twice the overall inflation rate again. This means that there was hardly any change in the food price increase at the beginning of 2023 (December 2022: +20.4%).
Higher prices were seen in all food groups also in January 2023. Considerably higher prices were recorded for dairy products and eggs (+35.8%) as well as edible fats and oils (+33.8%). Marked price rises were also observed for bread and cereals(+22.7%), for example.
Excluding energy prices, the inflation rate stood at +7.2% in January 2023. The extent to which food prices currently affect the overall rate of price increase is shown by the inflation rate when energy and food are excluded. It was markedly lower at +5.6%.
The inflation rate excluding energy and food nevertheless shows that inflation is high also for other product groups. This rate had been above the five-percent threshold already in December 2022 (+5.2%) and it rose further in January.
The prices of goods (total) were up 12.7% in January 2023 compared with the same month a year earlier. The price increase for non-durable consumer goods was particularly large (+17.0%). Considerable price rises were recorded not only for energy and food but also for non-durable consumer goods for housekeeping (+14.6%) and for tobacco products (+8.0%).
Prices of durable consumer goods were up 6.2% on the same month of the previous year. Substantial price increases were observed especially for furniture and lighting equipment (+10.2%) as well as vehicles (+8.4%).
The prices of services (total) were up 4.5% in January 2023 on the same month of the previous year. Net rents exclusive of heating expenses rose 2.0%.
Above-average price increases were observed for some services, for example, for maintenance and repair of dwellings (+16.9%) and catering services in restaurants, cafes and the like (+10.9%). Prices were down year on year for a very small number of services, for instance, telecommunications services (-1.1%).
Compared with December 2022, the consumer price index rose by 1.0% in January 2023. Total energy prices increased by 8.3%. Marked price increases were recorded for natural gas (+46.1%) and district heating (+63.9%), and electricity prices were up, too (+6.5%).
The increase in natural gas and district heating prices reflects the end of the December immediate assistance. The price freezes for natural gas, district heating and electricity slowed the price increase only in part in January 2023. Among mineral oil products, motor fuel prices increased (+1.9%), whereas heating oil prices were down (-3.3%).
Also, households again paid more for food (+1.6%), in particular for dairy products (+2.6%). Seasonal price decreases were observed especially for package holidays (-19.1%), air tickets (-15.7%) and clothing (-5.4%). ■