High German inflation eases slightly

German inflation eased in September to 2.9 percent on a 12-month basis, from 3.1 percent the previous month, final figures released on Wednesday by the national statistics office showed.

High German inflation eases slightly
Commodity prices have surged over the past year. Photo: DPA

On a monthly basis, inflation in the biggest European economy edged down by 0.1 percent, the Destatis office said.

The final figures confirmed a Destatis estimate given in late September. “A slight easing has continued,” a statement said, in part owing to base effects, which mean that strong increases in September 2007 had produced higher figures that made the difference less pronounced this time around.

Energy prices were among those that gained the most on the year, posting an increase of 12.2 percent, while the cost of food products gained 6.4 percent. When energy prices were stripped out, annual inflation fell back to 1.8 percent, Destatis said.

A breakdown of energy costs showed an increase of 14.8 percent for petroleum products, including a jump of 32.1 percent for heating oil and 10.1 percent for motor fuels.

An above-average increase of 14.1 percent was seen in the cost of natural gas used to heat homes, which would likely pinch household budgets further even as overall inflation declined.

The slight decrease in September from August was essentially the result of seasonal factors, with the cost of package tours falling by 7.0 percent on the month for example, Destatis said.


Inflation rose in Germany in December: report

Inflation in Europe's largest economy Germany clambered higher in December, official data showed Friday, but remained short of the European Central Bank's target for the 19-nation eurozone.

Inflation rose in Germany in December: report
Prices in Germany are rising, but not as fast as they should be. Photo: Jens Büttner / zb / dpa
Price growth hit 1.5 percent year-on-year last month, statistics authority Destatis said, some 0.4 percentage points higher than in November.
And it reached the same level when measured using the Harmonised Index of Consumer Prices (HICP) yardstick preferred by the ECB.
But while German price growth was headed in the right direction, it was still well short of the ECB's just-below-two-percent goal. Over the full year 2019, inflation averaged just 1.4 percent.
“There is little sign of sustained growing price pressure that could prompt the ECB to rethink its ultra-expansive monetary policy,” said economist Uwe Burkert of LBBW bank.
Here's a graph put together by the German newswire DPA, showing how the inflation rate in Germany has fluctuated between 2008 and 2019. 
The ECB has set interest rates at historic lows, granted hundreds of billions of euros in cheap loans to banks, and bought more than 2.6 trillion euros ($2.9 trillion) of bonds in efforts to keep credit flowing to the economy, stoking growth and inflation.
But it has fallen short of its eurozone-wide price growth target for years, predicting last month it would inch up to just 1.6 percent by 2022.
Economists have pointed to both uncertainty over political events, like trade wars and Brexit, and long-term developments like ageing populations as possible reasons for sluggish growth and inflation.
Under new chief Christine Lagarde, the ECB plans to launch a wide-ranging “strategic review” this year, its first since 2003, that could adjust its tools or even reexamine the inflation target itself.
In the meantime, she has urged countries — like Germany — with sound government finances to lift spending in hopes of juicing the economy.