Final HICP

September: flat m/m, +2.1% y/y (unrevised)
August: flat m/m, +2.2% y/y

Final CPI

September: flat m/m, +2.0% y/y (unrevised)
August: +0.4% m/m, +2.1% y/y
—

FRANKFURT (MNI) – German consumer price inflation in September was
confirmed at annual rates of +2.1% in EU harmonized terms and +2.0% in
national terms, with core rates unchanged from August, the Federal
Statistical Office reported Thursday.

In monthly terms, both HICP and CPI were unchanged, also confirming
initial estimates.

Household energy price inflation eased in September to +5.9% on the
year on the back of slower monthly price increases for gas (+0.4%),
heating oil (+0.7%) and electricity (flat).

The rise in motor fuel prices also slowed in September, up 2.4% on
the month to give an annual rate of +8.9%.

Excluding the above components, core CPI came to +1.4%, in line
with last month’s reading. Factoring out only household energy, the
annual core rate came to +1.7%, also unchanged from August.

Upward pressure from energy on the overall price index should wane
as base effects from the strong oil price jump back in September 2011
take effect. Growing pessimism regarding the global economic outlook is
also likely to weigh on oil price developments moving forward.

The International Monetary Fund has revised down its global growth
forecasts and now sees the world economy expanding by 3.3% this year and
by 3.6% in 2013. Three months ago it had projected growth of 3.5% and
3.9% for 2012 and 2013, respectively.

“Looking ahead, no significant improvement appears in the offing,”
the IMF said.

Food and non-alcoholic beverages were 0.3% cheaper on the month due
to sharp falls for fruit (-2.8%) and vegetables (-2.6%), which offset a
slight rise in meat prices (+0.3%). As a result, the annual rate eased
by 0.3 percentage point to +2.8%.

With motor fuel inflation easing, transport costs slowed to +0.7%
on the month, bringing the year-on-year change to +3.8%.

Weighed by the 8.3% monthly drop in package vacation tour prices,
overall leisure prices fell 1.8% to give an annual rate of +2.2%.

Strong competition among German manufacturers continued to weigh on
prices at the factory gate in September, bringing down output prices for
the fourth consecutive month, according to recent PMI polls.

However, an Ifo institute poll showing upward revisions to selling
price expectations of both wholesalers and retailers suggests consumers
could soon feel the bite of higher prices in the near term.

Households already appear wary of higher prices to come. A European
Commission survey showed the proportion of consumers expecting prices to
trend higher over the next 12 months rising further in September to its
highest level since April.

The International Monetary Fund expects German consumer price
inflation to average +2.2% this year and slow to +1.9% in 2013.

— Frankfurt bureau: +49 69 720 142; email: frankfurt@mni-news.com —

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