Press release No. 025 of 19 January 2021
Consumer price index, December and year 2020
-0.3% on the same month a year earlier (provisional result confirmed)
+0.5% on the previous month (provisional result confirmed)
+0.5% on an annual average in 2020 compared with 2019 (provisional result confirmed)
Harmonised index of consumer prices, December and year 2020
-0.7% on the same month a year earlier (provisional result confirmed)
+0.6% on the previous month (provisional result confirmed)
+0.4% on an annual average in 2020 compared with 2019 (provisional result confirmed)
WIESBADEN – Consumer prices in Germany rose by 0.5% on an annual average in 2020 compared with 2019. The increase was markedly below the relevant level in the previous year (2019: +1.4%). The Federal Statistical Office (Destatis) also reports that a lower annual rate of price increase was last measured in 2009 during the financial and economic crisis (+0.3%). In December 2020, the inflation rate, measured as the year-on-year change in the consumer price index, stood at -0.3%. This was the fifth time that the rate was negative in 2020.
Reduction in value added tax rates dampened prices in the 2nd half of 2020
One of the reasons for the low annual rate of price increase was the temporary value added tax reduction. This measure of the Federal Government's stimulus package was implemented on 1 July 2020. It had a downward impact on the consumer prices as a whole and differing effects on the individual groups of products in the second half of 2020.
Prices of energy products in particular down on an annual average in 2020
The prices of energy products were markedly down by 4.8% in 2020 year on year, following a 1.4% rise in 2019. Declining prices were especially recorded for heating oil (-25.9%) and motor fuels (-9.9%). In addition to the value added tax reduction, this was particularly due to the oil price slump in the world market seen during the first months of the year. Electricity prices, in contrast, rose by 3.0%. Excluding energy prices, the annual rate of price increase in 2020 would have been +1.1%.
Above-average increase in food prices
Food prices rose above average in 2020 compared with 2019 (+2.4%). The price increase slowed during the year when the value added tax rates were reduced. Marked price increases were recorded for fruit (+7.1%) as well as meat and meat products (+6.1%) in 2020. However, lower prices were especially recorded for edible fats and oils (-4.1%).
Prices of goods fell by 0.4% in 2020 on 2019
In 2020 the prices of goods (total) were down by 0.4% on 2019. Among non-durable consumer goods, tobacco products to which the value added tax cuts did not apply saw a considerable price increase (+4.9%). Among consumer durables, for example, the prices of telephones (-6.0%) and information processing equipment (-4.4%) declined.
Prices of services up 1.3% in 2020 on 2019
The prices of services (total) rose above average by 1.3% (including net rent exclusive of heating expenses: +1.4%) on an annual average in 2020 compared with 2019. Much stronger price increases were recorded for some services like, for example, services of social facilities (+5.2%), hairdresser services and other services for personal care (+4.1%) and for the maintenance and repair of vehicles (+3.2%). The causes for these increases were manifold. In addition to the increase in minimum wage, compliance with sanitary measures to prevent COVID-19 infections can be expected to have contributed here. Above all long-distance rail tickets became less expensive (-14.9%), the main reason being the reduction in value-added tax on long-distance rail tickets from 19% to 7% that took effect at the beginning of the year.
Inflation rate remains negative at -0.3% in December 2020
Consumer prices declined by 0.3% all in all in December 2020 compared with December 2019. Thus the inflation rate did not exceed the zero level in the second half of 2020. The low inflation rate in December 2020 was attributable not only to the reduction in value added tax rates, but also to the decline in energy product prices which were 6.0% lower than in the same month of the previous year. A year-on-year price decline was recorded especially for heating oil (-23.5%) and motor fuels (-10.4%). Excluding energy prices, the inflation rate in December 2020 would have been +0.4%, that is, it would have exceeded the zero level.
The decline in energy prices was contrasted by a slight increase in food prices (+0.5%). However it slowed significantly at the end of the year (November 2020: +1.4%). Higher prices were recorded especially for fruit (+3.2%). In December 2020 the prices of goods (total) were down by 1.8% year on year. Consumers benefited in particular from lower prices of clothing and footwear (-5.4%).
However, the prices of services (total) were up 1.1% over the same period. Stronger price increases were recorded, for example, for net rents exclusive of heating expenses (+1.2%) and for some services (like services of social facilities: +5.4%; maintenance and repair of vehicles: +2.0%). The price development of telecommunications services (-3.3%), however, was consumer-friendly.
Increasing heating oil prices in a month-on-month comparison
Compared with November 2020, the consumer price index rose by 0.5% in December 2020. Consumers paid more especially for heating oil (+17.9%), but also for motor fuels (+2.6%). All in all the prices of energy products rose by 1.7%. In addition, rail tickets became more expensive as a result of the annual adjustments of railway fares in December (+1.8%). On the other hand, the prices of clothing and footware were considerably down at the end of the year (-4.3%).
Methodological note:
During the whole year, a number of prices could not be collected on a monthly basis due to the measures taken to contain the coronavirus pandemic. Where quality reductions were observed for specific product groups, the results have been marked accordingly. More information about the methods used during the corona crisis and the impact on price collection is provided in our methodological paper.
Annual rate of price increase, excl. imputed prices, at +0.6%
Due to the coronavirus pandemic, prices could temporarily not be collected for some goods and services in 2020. The gaps in price collection were filled with prices imputed on the basis of methods harmonised at the European level. Quality requirements were thus fulfilled. Even if groups of goods for which prices were largely imputed in the course of 2020 had not been considered, the annual inflation rate would have been +0.6%.
Crisis Monitor enables comparison between corona crisis and financial and economic crisis
The consumer price index also forms part of the "Crisis Monitor" (www.destatis.de/krisenmonitor), by means of which the Federal Statistical Office compares the development of major short-term indicators in the corona crisis and the financial and economic crisis of 2008/2009. The Crisis Monitor complements the "Corona statistics webpage" (www.destatis.de/corona), which provides statistical information on the economic and social consequences of the coronavirus pandemic.
On 20 January 2021, the Statistical Office of the European Union (Eurostat) will publish the euro area inflation rate for December 2020. Methodological notes on the weighting pattern of the HICP 2021 are contained in another methodological paper (only in german).
| Overall index / subindex | Weighting | 2020 A | December 2020 | |
|---|---|---|---|---|
| Change on 2019 A | Change on the same period a year earlier | Change on the preceding month | ||
| in per mill | in per cent | |||
A = annual average 1: Results do not include charges. | ||||
| Overall index | 1,000.00 | 0.5 | -0.3 | 0.5 |
| Food and non-alcoholic-beverages | 96.85 | 2.3 | 0.4 | -0.4 |
| Food | 84.87 | 2.4 | 0.5 | -0.4 |
| Meat and meat products | 18.60 | 6.1 | 2.7 | -0.3 |
| Fruit | 8.88 | 7.1 | 3.2 | 0.6 |
| Vegetables | 11.08 | -0.3 | -2.8 | -3.0 |
| Alcoholic beverages and tobacco | 37.77 | 2.6 | 1.7 | -0.3 |
| Clothing and footwear | 45.34 | -0.9 | -5.4 | -4.3 |
| Housing, water, electricity, gas and other fuels | 324.70 | 0.7 | 0.2 | 0.3 |
| Net rent exclusive of heating expenses | 196.32 | 1.4 | 1.2 | 0.0 |
| Household energy | 68.82 | -2.2 | -3.9 | 1.2 |
| Electricity | 25.92 | 3.0 | 1.4 | -0.1 |
| Gas 1 | 13.53 | 0.3 | -2.0 | 0.1 |
| Heating oil 1 | 7.01 | -25.9 | -23.5 | 17.9 |
| Furniture, lighting equipment, appliances and other household equipment | 50.04 | 0.2 | -0.9 | 0.5 |
| Health | 46.13 | 0.8 | -0.5 | 0.1 |
| Transport | 129.05 | -2.0 | -2.7 | 0.9 |
| Motor fuels | 35.01 | -9.9 | -10.4 | 2.6 |
| Supergrade petrol | 25.66 | -9.6 | -9.9 | 2.0 |
| Diesel fuel | 8.64 | -11.0 | -12.1 | 4.3 |
| Communication | 26.72 | -1.7 | -3.4 | -0.2 |
| Recreation and culture | 113.36 | 0.0 | 1.0 | 4.4 |
| Package holidays | 26.62 | (-3.1) | (-3.5) | (22.2) |
| Education | 9.02 | -0.9 | 0.5 | 0.0 |
| Restaurant and accommodation services | 46.77 | 2.2 | (1.8) | (0.3) |
| Miscellaneous goods and services | 74.25 | 1.8 | 1.4 | 0.2 |
| Overall index | ||||
| Excluding food and energy | 811.30 | 0.9 | 0.4 | 0.5 |
| Excluding energy (household energy and motor fuels) | 896.17 | 1.1 | 0.4 | 0.4 |
| Excluding heating oil and motor fuels | 957.98 | 1.1 | 0.3 | 0.4 |
| Goods | 468.16 | -0.4 | -1.8 | 0.0 |
| Non-durable consumer goods | 297.54 | -0.4 | -1.7 | 0.4 |
| Energy | 103.83 | -4.8 | -6.0 | 1.7 |
| Services | 531.84 | 1.3 | 1.1 | 0.9 |
Detailed data and long time series of consumer price statistics can also be found in the Genesis Online database in tables 61111-0004 and 61111-0006 (consumer price index) as well as in tables 61121-0002 and 61121-0004 (harmonised consumer price index).
