Germany's consumer price index fell slightly in September

According to the report from the Federal Statistical Office (Destatis), the inflation rate in Germany, measured as the year-on-year change in the consumer price index, stood at -0.2% in September 2020. This was the second time this year that the inflation rate fell below zero (July 2020: -0.1%). A lower rate was last measured in January 2015 (-0.3%). Destatis also reports that consumer prices also decreased by 0.2% when compared with August 2020.

One of the reasons for the low inflation rate is still the temporary value added tax reduction, which was implemented on 1 July 2020 as a measure of the Federal Government's stimulus package. Since then, it has had a downward effect on the consumer prices compared with a year earlier.

The prices of goods (total) fell 1.7% from September 2019 to September 2020. This is mainly due to price decreases for energy products (-7.1%), which accelerated again (August 2020: -6.3%).

The marked year-on-year decrease in energy product prices had a downward effect on the inflation rate. Excluding energy product prices, the inflation rate would have been +0.6% in September 2020.

Compared with August 2020, the overall consumer price index fell by 0.2% in September 2020. Due to seasonal factors, at the end of the summer holidays, prices decreased for overnight stays (-1.6%). Also, energy product prices declined by 0.7%; consumers paid less especially for heating oil (-6.9%). The prices of goods (total) went down slightly (-0.3%) compared with the previous month. However, prices were substantially up both for clothing (+5.6%) and for footwear (+3.6%). A major reason here was the changeover to the autumn/winter collection.