--German consumer prices fell 0.3% on year by national standards and declined 0.7% on EU-harmonized standards

--The decrease was again driven by a reduction in value-added-tax

--On the month, consumer prices rose 0.5% by national standards and 0.6% by EU-harmonized standards

 
    By Maria Martinez 
 

German consumer prices declined further in December compared with the same month a year before, confirming preliminary data, German statistics agency Destatis said Tuesday.

On a year-on-year basis, consumer prices fell 0.3% by national standards, in line with the drop expected by economists polled by The Wall Street Journal.

Consumer prices declined 0.7% year-on-year by EU-harmonized standards, as expected by economists polled by The Wall Street Journal.

On a month-on-month basis, consumer prices rose 0.5% by national standards and 0.6% by EU-harmonized standards, meeting projections by economists polled by The Wall Street Journal.

The inflation rate was partly influenced by the temporary value-added-tax reduction that became effective at the beginning of July, the statistics office said.

In 2020, consumer prices in Germany rose 0.5% on an annual average compared with 2019, Destatis said. The increase was markedly below the 1.4% rise recorded in 2019. Destatis said a lower annual rate of price increases was last measured in 2009 during the financial crisis, when there was an average annual increase of 0.3%.

The prices of energy products fell 4.8% in 2020, following a 1.4% rise in 2019. In addition to the VAT reduction, this was mainly due to the oil price slump in the world market during the first months of the year, Destatis said.

Food prices rose 2.4% in 2020, the statistics office said. Marked price increases were recorded for fruit, which rose 7.1%, as well as meat and meat products, which increased 6.1%.

The prices of goods were down 0.4% compared to 2019, while the prices of services rose 1.3%, Destatis said. In addition to an increase in the minimum wage, compliance with sanitary measures to prevent Covid-19 infections can be expected to have contributed to the increase in services prices in 2020, Destatis said.

 

Write to Maria Martinez at maria.martinez@wsj.com

 

(END) Dow Jones Newswires

January 19, 2021 02:54 ET (07:54 GMT)

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