Strongest increase of consumer prices since 1994

According to the Federal Statistical Office, consumer prices increased by 2.2% in the year 2007 as compared to the year 2006. This increase is the strongest since 1994. In the year 2006 inflation amounted to just 1.7%. Most important factors for this accelerated inflation are increased value added and insurance taxes as well as energy prices.

Energy (household energy and fuels) became by 3.9% more expensive. Prices for electricity grew most by +6.8%. Prices for mineral oil products increased by 3.0% on average in 2007 as compared to 2006 (fuels: +4.1%; light fuel oil: -1.2%). Without taking into account energy prices the average annual inflation had amounted to 1.9% only.

The significant increase of consumer prices beyond the two-percent-barrier was due to gradual price rises for foodstuffs in the second half of 2007 (+3.1% on average in 2007). Some prices such as for dairy products and flour increased by two-digit percentages (e.g. butter: +19.1%; flour: +15.4%; curd cheese: +12.0% and full-cream milk: +10.3%). On the other hand, e.g. prices for consumer durables (+0.9%), garments (+0.8%) as well as telephone, internet and other kinds of communication (+0.2%) rose to a smaller extent than consumer prices as a whole.

In December 2007 the consumer price index was up by 2.8% in comparison to December 2006. In September the inflation rate broke through the 2%-barrier. In November the inflation rate peaked reaching 3.1% and in December it somewhat slowed down amounting to +2.8%. As compared to November 2007 the index increased by 0.5% in December.

In December as well as over the entire year 2007 it was energy prices which drove the inflation rate up. Without taking into account the price rises for energy inflation had amounted to 2.2% only in December 2007.

The significant price index increase in the period November/December 2007 is mainly due to seasonal price rises: apart from prices rises for some kinds of fruits and vegetables (e.g. grapes: + 16.0% and lettuce: + 13.1%) there were in particular the usual price increases for package tours (+ 32.5% compared to November 2007) and accommodation (+ 20.8%).

Consumer-friendly, on the other hand, was the development of fuel prices (-5.4%). Prices for garment and footwear also started to fall (-1.0%) due to upcoming change from winter to spring collections.

The harmonised European consumer price index for Germany increased by on average 2.3% in the year 2007. This index rose by 3.1% in December 2007 in comparison to December 2006 and by 0.7% from November to December last year. GERMAN