Bavaria CPI

March: +0.1% m/m, +2.3% y/y
February: +0.9% m/m, +2.6% y/y
—
Pan-German CPI

MNI median forecast: +0.4% m/m, +2.2% y/y
MNI forecast range: +0.3% to +0.6% m/m

February: +0.7% m/m, +2.3% y/y
—

BERLIN (MNI) – Consumer prices in the western German state of
Bavaria rose 0.1% in March, dampening the annual inflation rate to +2.3%
from +2.6%, the state statistics office said Wednesday.

The monthly result is below with the median forecast of +0.4% for
pan-German CPI in a MNI survey of analysts.

Motor fuel prices surged 3.7% on the month, while heating fuel was
2.5% cheaper, leaving household energy costs down 0.3%. Excluding petrol
and heating fuel, prices were still up 0.1% on the month but only 2.0%
higher on the year.

After the winter holiday season, prices for package holiday tours
fell 2.9% on the month, while hotel services were down 4.1%. Food was
overall 0.2% costlier, despite a 0.6% dip for seasonal produce. Clothing
prices were up 2.7% on the month.

Annual price developments were again driven by energy, with heating
oil up 7.6% and motor fuel up 6.6%. Food prices were up 2.9% and
clothing prices up 4.5%.

Due to sticky high oil prices, analysts expect annual inflation to
remain above 2% for the near future. However, core inflation is seen
rising only modestly due to weak wage growth over the past two years.

Last week, International Monetary Fund managing director Christine
Lagarde said that recent developments in oil had overtaken the Eurozone
sovereign debt crisis as the biggest concern for global growth.

The German Finance Ministry last week warned of inflation risks
from the oil price rise. “The resulting burden on purchasing power could
impair the momentum of consumption growth by private households,” it
cautioned.

Import prices in Germany maintained their upward trend in February
on the back of costlier energy, though the pace of increase declined,
the Federal Statistical Office reported on Tuesday.

ECB president Mario Draghi said on Monday that inflation in the
Eurozone was under control.

“Market indicators of inflation expectations overall show no signs
of inflation above our medium-term objective,” Draghi said. “Market
expectations of long-term inflation are fully consistent with our
definition of medium-term price stability.”

For detailed information see data table on MNI MainWire.

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

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