August 8, 2023

Consumer price index, July 2023
+6.2% on the same month a year earlier (provisional result confirmed)
+0.3% on the previous month (provisional result confirmed)

Harmonised index of consumer prices, July 2023
+6.5% on the same month a year earlier (provisional result confirmed)
+0.5% on the previous month (provisional result confirmed)

The inflation rate in Germany, measured as the year-on-year change in the consumer price index, stood at +6.2% in July 2023. In June 2023, the inflation rate was +6.4%. “The rate of inflation has fallen slightly but remains at a high level”, says Ruth Brand, President of the Federal Statistical Office. She adds: “Especially the development of food prices continues to have an upward effect on inflation. In addition, the increase in energy prices was again somewhat larger than in the two previous months. The abolishment of the EEG surcharge with effect from 1 July 2022 created a base effect here.” The Federal Statistical Office (Destatis) also reports that consumer prices in July 2023 rose by 0.3% on June 2023.

Prices of energy products up 5.7% year on year

Energy product prices in July 2023 were 5.7% higher than in the same month a year earlier, following increases of 3.0% and 2.6% in June and May 2023, respectively. The development of electricity prices was especially striking. Consumers had to pay 17.6% more for electricity in July 2023 than in July 2022. June 2023 had seen a year-on-year rise of 10.5%. The large increase is mainly due to the abolishment of the EEG surcharge with effect from 1 July 2022. The downward effect on the inflation rate ceased to apply in the reference month of July 2023.

From July 2022 to July 2023, price increases were particularly pronounced for solid fuels (+12.8%) and natural gas (+8.5%). Below-average price increases were reported for district heating (+2.1%). By contrast, the prices of mineral oil products fell considerably by 7.8%, and the prices of heating oil in particular (-35.5%). Motor fuels also cost less than a year earlier (-4.9%) despite the previous year’s fuel discount.

Food prices remain biggest driver of inflation: +11.0% from July 2022

Food prices in July 2023 were up 11.0% year on year after a 13.7% increase in June 2023. Food therefore remained the biggest driver of inflation among all product groups. Prices continued to be higher than a year earlier in nearly all food groups. In particular, consumers had to pay markedly more for sugar, jam, honey and other confectionery (+18.9%). There were also considerable year-on-year price increases for bread and cereals (+16.6%), vegetables (+15.7%) and fish, fish products and seafood (+14.1%). By contrast, edible fats and oils cost 12.9% less than a year earlier.

Inflation rate excluding energy and food at +5.5%

Excluding energy prices, the inflation rate stood at +6.2% in July 2023. When energy and food prices are excluded, the inflation rate was lower (+5.5%), which demonstrates the significant role food prices currently play in overall inflation. This rate, which is often referred to as “core inflation”, simultaneously demonstrates that inflation also remains high in other product groups. In June 2023, the consumer price index excluding food and energy was slightly higher at +5.8%. This means that core inflation slowed slightly in July 2023.

Goods prices up 7.0% on July 2022

The prices of goods (total) were up 7.0% in July 2023 on the same month of the previous year. The price increase was particularly pronounced for non-durable consumer goods (+8.6%), which was mostly due to higher prices of food and non-alcoholic beverages (+10.9%). The prices of durable consumer goods rose by 4.5% compared with July 2022.

Service prices up 5.2% year on year

The prices of services (total) increased by 5.2% in July 2023 on the same month of the previous year. Net rents exclusive of heating expenses had a dampening effect on prices (+2.1%) and therefore were a significant contributor to the below-average increase in service prices. In addition, the introduction of the Germany ticket has had a slight downward effect on price developments since May 2023. However, an upward base effect enters into play from June 2023 due to the availability of the 9-euro ticket in the period from June to August 2022. Therefore, short-distance rail tickets cost much more (+64.6%) in July 2023 than in July 2022 despite the introduction of the Germany ticket (June 2023: +65.2%, May 2023: +0.6%). Combined tickets for rail, bus and the like were also markedly more expensive as a result, more than doubling in price (+112.5%) from July 2022 (June 2023: +112.8%, May 2023: -22.9%). In addition, the prices of several other services increased considerably, for instance maintenance and repair of dwellings (+12.8%), services of social facilities (+11.6%) and restaurant services (+7.7%).

Prices up 0.3% on the previous month

Compared with June 2023, the consumer price index was up 0.3% in July 2023. Price increases were recorded in particular for package holidays (+11.2%) and transport services (+5.0%). Food prices dropped slightly (-0.3%) compared with the previous month, with a particular decline registered for the prices of fish, fish products and seafood (-2.2%) and vegetables (-1.7%). A similar decrease was observed in the prices of energy (total) (-0.1%). Electricity prices decreased slightly from the previous month (-0.5%). In contrast to the year-on-year comparison, the month-on-month inflation rate for electricity is not affected by the abolishment of the EEG surcharge as of July 2022 because the EEG surcharge has not been included in the rate since July 2022.

Source: DESTATIS
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