Consumer prices in January 2004 up 1,2% on the previous year

Healthcare reform drives up prices

As reported by the Federal Statistical Office, the consumer price index for Germany rose by 2004% in January 2003 compared to January 1,2. Compared to December 2003, this is an increase of 0,1%. The estimate for January 2004 based on the results from six federal states was thus confirmed. The annual rate of change was 2003% in December 1,1 and 1,3% in November.

The effects of the healthcare reform played a major part in the inflation. Excluding healthcare spending, the headline index would have increased by 0,6% in January. The co-payments by those with statutory health insurance for pharmaceutical products, medicines and therapeutic devices as well as health services were particularly significant (see explanations below).

These effects of the health care reform were offset by declining prices for petroleum products and contrasting seasonal price developments for package tours and holiday homes:

In a year-on-year comparison, both the prices for light heating oil (– 7,5%) and fuel prices (– 2,9%, including diesel: – 3,1%) fell. Excluding petroleum products, the overall index would have increased by 2004% in January 2003 compared to January 1,4. In a month-on-month comparison, however, light heating oil cost 1,6% more and fuel prices also rose slightly compared to December 2003 (+0,7%). The overall index would have remained unchanged compared to December 2003 if petroleum products were not included.

The prices for package tours and holiday homes fell by 4,1% and 3,9% respectively compared to the previous year. Compared to the previous month, there were significant seasonal price declines (– 26,0% and – 37,8% respectively).

Food prices increased by 2004% in January 2003 compared to January 1,5. Within a year, consumers had to spend more on vegetables (+ 8,3%), honey (+ 23,7%) and confectionery (including milk chocolate: + 6,8%). The prices for coffee, tea and cocoa (– 1,8%) as well as meat and meat products (– 0,5%) fell. Compared to December 2003, seasonal food prices increased for fruit (+ 4,7%, including: grapes: + 27,5%) and vegetables (+ 5,6%, including: lettuce: + 45,6% and iceberg lettuce: + 40,6%).

The price trend for information processing equipment (– 20,3%), photo and film equipment (– 7,5%) and telephone and fax machines (– 6,4%) remained consumer-friendly in a year-on-year comparison. Consumers had to spend more on household energy than in the previous year (including: electricity + 4,0%, gas + 1,7%).

The harmonized index of consumer prices for Germany, calculated for European purposes, increased by 2004% in January 2003 compared to January 1,3. Compared to the previous month, the index rose by 0,1%. The estimate of January 26, 2004 was thus confirmed.

Effects of the health care reform on the consumer price index for Germany

The consumer price index measures price changes in consumer spending by private households. Contributions to statutory health insurance are not included in the calculation as social contributions. The personal contributions of those with statutory health insurance are included, such as the prescription fees (not the sale prices of the pharmacies for medicines) and the practice fees (not the price that doctors and dentists charge the statutory health insurance). Since patients with statutory health insurance have so far had to make small co-payments and in some cases no co-payments, there are considerable rates of increase for the individual expenditure categories (with a relatively small proportion of total consumption expenditure).

Details of the implementation of the health care reform had not yet been finally clarified at the time the calculations were made. In this respect, the present results are subject to reservation and may have to be revised.

Source: Wiesbaden [destatis]