2020.08.1307:14:00UTC+00German Consumer Prices Fall As Estimated

German consumer prices fell in July, as initially estimated, mainly due to the reduction in the value added tax, final data from Destatis revealed on Thursday.

The consumer price index fell 0.1 percent in July, after a 0.9 percent rise in June, as initially estimated.

On a monthly basis, consumer prices fell 0.5 percent July, as estimated.

Prices for transport declined the most, by 3.2 percent yearly in July and communication cost fell 2.5 percent. Prices for clothing and footwear, and furniture, household equipment decreased by 0.7 percent and 0.4 percent, respectively.

Meanwhile, prices for alcoholic beverages and tobacco grew 3.2 percent.

Excluding food and energy, inflation came in at 0.8 percent.

After the inflation rate rose in June, the value added tax reduction, which is a measure of the Federal Government's stimulus package, had a downward effect on the development of prices, the agency said.

Inflation, based on the harmonized index of consumer prices, or HICP remained unchanged annually in July, as initially estimated. In June, the index rose 0.8 percent.

On a month-on-month basis, the HICP fell 0.5 percent, also in line with expectations in July.

Another report from Destatis revealed that wholesale prices declined at a softer pace of 2.6 percent annually in July, following a 3.3 percent fall in June.

On a monthly basis, wholesale prices rose 0.5 percent in July, after a 0.6 percent increase in the prior month.