–German statistics agency corrects HICP m/m figure to +0.6%, not +0.5%

Flash Mar HICP: +0.6% m/m, +1.3% y/y
Flash Mar CPI: +0.5% m/m, +1.1% y/y

MNI median forecast: +0.3% m/m, +0.9% y/y
MNI forecast range: +0.1% to +0.4% m/m

MNI median forecast: +0.3% m/m, +0.9% y/y
MNI forecast range: flat to +0.4% m/m

Final Feb HICP: +0.4% m/m, +0.5% y/y
Final Feb CPI: +0.4% m/m, +0.6% y/y

————–

BERLIN (MNI) – German consumer prices in March rose 0.5% in
national terms and 0.6% in EU-harmonized terms, with annual rates
standing at +1.1% for CPI and +1.3% for HICP, the Federal Statistical
Office (FSO) estimated Monday.

The median forecasts in a MNI survey of analysts were for a 0.3%
monthly rise of both CPI and HICP.

As usual, the Federal Statistics Office provided few details on
price developments with the flash release. It noted that motor fuel in
the six states that released CPI data today rose by between 3.8% to 7.7%
while heating oil prices climbed by between 3.9% to 8.8%. Food prices
rose by between 0.7% to 1.1%.

In an annual comparison, heating oil prices climbed up to 35.1% and
motor fuel by up to 21.1%. Food prices dropped by between 0.6% to 1.1%.

Today’s annual HICP, though higher than expected, is still well
below the ECB’s medium-term price stability goal for the Eurozone of
close to but below 2%.

Analysts expect underlying German inflation to stay moderate for
the time being. The huge slack in the German economy and a clouded
outlook for consumer spending leave firms little leeway for price hikes,
they note.

With unemployment expected to rise throughout the year, wage growth
in all likelihood will remain very moderate. Germany’s largest trade
union, the IG Metall, recently settled for a moderate pay rise in the
important metalworking and engineering industry.

Bundesbank President Axel Weber predicted earlier this month that
price levels in Germany will rise only very moderately given the fairly
subdued nature of the recovery.

The OECD forecast last week that German GDP would grow by 1.3% in
2010 and by 1.9% in 2011. On a workday-adjusted basis, it put German GDP
at +1.1% in 2010 and +1.9 in 2011.

Despite growth above potential — estimated to be 0.8% over the
period from 2009 to 2011– a sizable output gap will remain even at the
end of 2011, the OECD said. That is likely to restrain inflationary
forces, it remarked.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$G$$$,M$X$$$,MAGDS$,M$XDS$,MT$$$$]