Germany Import Price Index y/y

For the monthly price index of imports, the prices are calculated in euro (foreign currencies are converted at the current exchange rate), which are incurred by the importer at the German border, they are not list prices. In terms of trade, such prices are given the suffix CIF (cost, insurance, freight), which also describes the location of the price collection. For the importer this means on the one hand higher costs, but on the other hand also a lower risk. Prices do not include public charges such as customs duties or taxes. Import prices are collected at around 4,900 reporting points by around 3,600 price representatives.

The index can be described as the weighted average of the individual price change figures formed for a representative selection of imported goods (the so-called price representatives). The index weights for the selected goods are based on the corresponding import values from the foreign trade statistics for the respective base year.

The individual price series are standardized to a base year (= 100). For some world trade goods – e.g. grains and metals – international stock exchange quotations are also used. To ensure that the monthly values of an individual price series only reflect "pure" price changes, adjustment procedures are used for quality changes.

The index is calculated according to the so-called Laspeyres formula. This means that the weighing figures from the current base year remain unchanged until the index is converted to a new base year. The next base year will be 2020, the latest one is 2010.

The import price index y/y measures the price changes of the respective month compared to the same month of the previous year. Rising import prices are an indicator of trade activity and an early indicator of consumer inflation.

The export price and import price indices are used to calculate the terms of trade, which is a measure of the economic strength of an economy in international competition. If import prices fall compared to export prices, the terms of trade improve. This is seen as positive for the economy and can have a positive impact on the currency. However, rising import prices increase inflation, and this can have a positive effect on the currency in the short term.