Surging vegetable prices help push German inflation to 2.2%
The inflation rate as measured by the consumer price index continued to increase (January 2017: +1.9%; December 2016: +1.7%).
An inflation rate of more than two percent was last recorded in August 2012 (also +2.2%). Compared with January 2017, the consumer price index rose by 0.6% in February 2017. The Federal Statistical Office (Destatis) thus confirms its provisional overall results of 1 March 2017.
Energy prices as a whole were markedly up in February 2017 compared with a year earlier (+7.2%) and again had a strong upward effect on the overall inflation rate.
The price increases for energy in recent months (January 2017: +5.9%; December 2016: +2.5%) were mainly due to the low level of energy prices a year ago. In 2016, the lowest level was reached in February 2016.
As a result of this base effect, the prices of especially heating oil (+43.8%) and motor fuels (+15.6%) were markedly up in February 2017 compared with a year earlier.
The year-on-year price changes for other energy products were much smaller (e.g. electricity: +1.6%; gas: −3.2%; charges for central and district heating: −4.7%). Excluding energy prices, the inflation rate in February 2017 would have been +1.7%; excluding the prices of mineral oil products, it would have been only +1.5%.
Food prices, too, were markedly higher at +4.4% in February 2017 than in February 2016. The increase in food prices thus accelerated (January 2017: +3.2%) and contributed significantly to the rise in overall inflation in February 2017.
The prices of vegetables (+21.0%), and especially of fresh vegetables like lettuce, tomatoes and cucumbers, were much higher in February 2017 than in the preceding year. Consumers paid considerably more also for edible fats and oils (+13.2%), fish and fish products (+5.4%) and fruit (+3.9%).
Compared with the overall inflation rate, the prices of goods as a whole increased by an above-average 3.2% in February 2017 from February 2016, which was mainly due to the rise in energy prices (+7.2%) and food prices (+4.4%).
Significant year-on-year price increases were also recorded for other goods such as newspapers and periodicals (+4.5%) and tobacco products (+3.2%). However, there were also some goods that showed price decreases as, for example, consumer electronics (–4.7%) and clothing (−0.5%).
Compared with goods prices, the year-on-year increase in service prices as a whole (+1.3%) was far less marked in February 2017. This rise in prices was mainly due to the increase in net rents exclusive of heating expenses (+1.6% from February 2016), as households spend a large part of their consumption expenditure on this item.
In addition, price increases were observed, among other things, for catering services (+2.0%) and insurance services (+2.4%).
A substantial year-on-year decline in prices was however recorded for services of social facilities (−6.1%), which was largely the result of implementing Act II on Strengthening Long-Term Care. The prices of air tickets (−3.0%) and telecommunication services (−1.1%) declined, too.
Compared with January 2017, the consumer price index rose by 0.6% in February 2017. The month-on-month increase in consumer prices as a whole was mainly due to seasonal factors.
Thus the prices of vegetables were up 12.2%. Marked price increases were recorded especially for fresh vegetables like butterhead lettuce or iceberg salad (+44.1%), peppers (+35.1%) and tomatoes (+25.8%).
Package holiday prices (+9.4%), too, were notably higher than in the previous month. In addition, price increases were recorded for gardens, plants and flowers (+2.1%, including cut flowers: +6.0%) and fruit (+1.7%, including grapes: +7.2%; citrus fruit: +5.2%).
The increase in food prices as a whole (+1.9%) in February 2017 can be largely explained by these seasonal price rises regarding vegetables and fruit.
The prices of energy (total) increased by only 0.3% month on month, including heating oil (+0.4%), motor fuels (+0.2%) and electricity (+0.2%). ■