March: +1.1% m/m, +11.3% y/y

MNI survey median: +1.7% m/m, +11.9% y/y
MNI survey range: +0.8% to +1.8% m/m

February: +1.1% m/m, +11.9% y/y

FRANKFURT (MNI) – Import prices in Germany rose further in March,
though less than generally expected, as cheaper capital goods imports
partially offset costlier energy, intermediate goods and consumer goods,
the Federal Statistical Office reported on Thursday.

On the month, import price inflation remained steady at +1.1%,
resulting in an annual increase of 11.3%.

With Brent crude up just over 11% on the month, import price
inflation is once again primarily an energy story, as evidenced by the
component rising 6.7% compared to February’s level. On the year,
imported energy prices increased 36.4%.

Excluding energy, the core import price index fell 0.1% m/m to give
an annual inflation rate of +6.6%.

Although off their near three-year highs earlier this month, oil
prices have recently resumed their upward trend and now lie comfortably
above $125 a barrel.

However, recent data already pointed to a decline in the demand for
oil, the International Energy Agency (IEA) said, which could ultimately
help to bring prices down further. “Unfortunately, the surest remedy for
high prices may ultimately prove to be high prices themselves,” the IEA
said.

Imported intermediate goods prices, often the first to reflect
trends in raw material costs, edged up 0.1% on the month, resulting in
an annual growth rate of +12.6%.

Capital goods prices fell back 0.4% on the month to give an annual
decline of 0.1%. Consumer goods import prices, boosted by a gain in
consumer non-durables, were up 0.5% on the month and 4.4% higher on the
year.

Export prices were up 0.3% on the month and 4.9% on the year, the
statistics office added.

Preliminary figures released earlier this week indicated that
consumer price inflation in Germany rose to a stronger-than-expected
2.4% y/y, hinting at an upside surprise in the overall Eurozone figure
as well.

A number of European Central Bank Council members have already gone
on record saying that the ECB could act if the inflation outlook
deteriorates further.

“If the picture we have of inflation in the Eurozone deteriorates
from what we have seen in the past few months, then certainly more
adjustment would be required,” said Cypriot central bank head Athanasios
Orphanides.

ECB Vice President Vitor Constancio hinted that the central bank
may not even wait that long: “In view of commodity prices…one can only
fear that [second-round inflation effects] may happen and one has to be
in that respect preemptive.”

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

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