Wiesbaden (AP) - Inflation in Germany weakened significantly in August. Consumer prices were 1.4 percent higher than in the same month of the previous year, as calculated by the Federal Statistical Office.
The Wiesbadener authority confirmed on Thursday its end of August published provisional numbers to the inflation. In July, the inflation rate was still at 1.7 percent. From July to August 2019, consumer prices fell by 0.2 percent.
Energy prices had a dampening effect in August: they only rose by 0.6 percent compared to the same month last year. In July, it was still 2.4 percent. In August, consumers had to pay more for district heating (plus 4.7 percent), natural gas (plus 4.6 percent) and electricity (plus 3.8 percent) than in the year before. In contrast, prices for both heating oil (minus 5.2 percent) and fuels (minus 3.3 percent) fell significantly compared with August 2018.
Food prices rose more than average, a total of 2.7 percent. Food price inflation has strengthened for the fifth month in a row. Especially vegetables became more expensive, this consumers had to pay in August this year, 12.8 percent more than a year earlier. Fruit, however, was cheaper: by 2.6 percent.
The inflation rate is an important indicator of the monetary policy of the European Central Bank (ECB). For the entire eurozone and its 19 countries, the central bank is aiming for an annual inflation rate of just under 2.0 percent in the medium term - far enough from the zero mark. Because prices that are consistently low or wide-spread could mislead businesses and consumers to postpone investment. That can slow down the economy.
The price index HICP for Germany, which the ECB uses for its monetary policy, was 1.0 percent higher in August 2019 than in August 2018 for Germany.
Federal Statistical Office on Inflation Germany
Eurostat on inflation in the euro area