Germany: Harmonized prices post largest fall since January 2015 in September
Harmonized consumer prices dropped 0.38% from the previous month in September, following August’s 0.19% fall. The print reflected price drops for food and alcoholic beverages; housing, water, electricity, gas and other fuels; health; and transport more than offsetting a marked increase in clothing and footwear prices.
Harmonized prices decreased 0.4% year-on-year in September, which followed August’s 0.1% decrease. September’s reading marked the largest fall in harmonized prices since January 2015. This is in part due to the reduction in the value added tax, which entered force on 1 July as part of the government’s fiscal response to the Covid-19-induced downturn. Lastly, annual average inflation fell to 0.8% in September (August: 0.9%).