Saxony CPI

August: +0.3% m/m, +2.1% y/y
July: +0.4% m/m, +1.8% y/y

—
Pan-German CPI

MNI median forecast: +0.2% m/m, +1.9% y/y
MNI forecast range: -0.1% to +0.3% m/m

July: +0.4% m/m, +1.9% y/y

—

BERLIN (MNI) – Consumer prices in the eastern German state of
Saxony rose 0.3% in August, lifting the annual inflation rate to 2.1%
from +1.8%, the state statistics office said Wednesday.

The monthly result is above the median forecast of a +0.2% reading
for pan-German CPI in a MNI survey of analysts.

Upward pressure on monthly inflation came largely from energy, with
some downward pressure from seasonal foods. Excluding heating oil and
motor fuel, consumer prices rose 0.1% on the month and were +1.7% on the
year.

Heating oil was up 5.2% on the month and 15.7% on the year, motor
fuels rose 4.9% from July and 8.9% on the year.

Food prices fell 0.3% on the month, with seasonal foods down
2.6%. Food costs are still up 3.2% on the year, with seasonal foods up
7.5%.

Inflation ex-seasonal foods was up 0.4% from July and 2.1% on the
year. Core inflation excluding both energy and seasonal foods was up
0.1% on the month and 1.5% on the year.

North Rhine-Westphalia already put some upside pressure on the
pan-Germany forecast with its results on Tuesday, reporting that
consumer prices rose 0.4% on the month and were up 1.9% on the year,
also thanks to energy price gains. Excluding heating oils and fuels,
prices in the state rose 0.2% on the month and 1.7% on the year.

Energy prices were cited as a key risk to the economic outlook by
the Bundesbank in its August monthly report, though President Jens
Weidmann in a weekend interview with Der Spiegel reiterated that he saw
no “immediate inflation dangers.”

While the central bank said risks to the outlook have “increased
notably” for the second half of 2012, also due to the Eurozone crisis,
it suggested the ongoing weakening of energy price pressures should
continue to encourage strong consumer spending in the second half of the
year.

German import prices rebounded 0.7% in July after three straight
monthly declines, though prices continued to fall when excluding energy
prices. The annual rate of inflation fell to +1.2%, the slowest pace
since December 2009.

Oil prices rose 7.9% in July, while Brent crude prices have
continued to pick up the pace in August, rising to a peak of more than
$116 last week before falling back to below 112$ this week.

Producer prices meanwhile were unchanged month-over-month in July,
dampening the annual rise to a 26-month low of 0.9%.

ECB Executive Board member Joerg Asmussen said Monday he continued
to expect weak economic growth and moderate inflation in the Eurozone,
with consumer prices likely falling below 2% in 2013.

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

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