Flash April HICP: +0.2% m/m, +2.6% y/y

MNI median forecast: +0.2% m/m, +2.4% y/y
MNI forecast range: +2.3% to +3.0% y/y

Final March HICP: +0.6% m/m, +2.3% y/y
————–
Flash April CPI: +0.2% m/m, +2.4% y/y

MNI median forecast: +0.1% m/m, +2.2% y/y
MNI forecast range: +2.1% to +2.7% y/y

Final March CPI: +0.5% m/m, +2.1% y/y
————–

BERLIN (MNI) – German consumer prices rose 0.2% in April in both
national terms and in EU-harmonized terms, boosting annual rates by 0.3
point to +2.4% for CPI and +2.6% for HICP, the Federal Statistical
Office (FSO) estimated Wednesday.

The median forecasts in a MNI survey of analysts were for a monthly
rise of 0.1% for CPI and an increase of 0.2% for HICP.

As usual, the Federal Statistics Office provided few details on
price developments with its flash estimate. It pointed to data from
reporting states which showed that upward pressure on monthly inflation
came from energy prices, with light heating oil and motor fuel rising
markedly.

Analysts caution that businesses will increasingly pass on their
high input costs, driven by the spike in energy prices. Selling price
expectations have risen across the board, they point out.

Some analysts already warn of a broad upward trend in inflation
which would increasingly weigh on consumer sentiment. Annual inflation
rates above 2% could become the norm, they fear.

Bundesbank President Axel Weber said earlier this month that
inflation in the Eurozone could average as much as 2.5% this year and
price pressures in Germany may be even more intense.

In Germany, inflation “should also be significantly above 2%,”
Weber said. “I even expect towards the end of the year and in the second
half due to base effects…rates of increase that could be just under
3%.”

European Central Bank president Jean-Claude Trichet said in a
newspaper interview on Tuesday that it is “extremely important to
prevent second-round effects after the ‘hump’ in the headline inflation
rate.” It is “not acceptable,” he said, to allow any perception that
energy and food inflation might become persistent influences on overall
inflation.

“We have risks of second-round effects here and there,” Trichet
observed. “We have to be very alert that they do not materialise.” In
fact, he said, “at the moment I do not see any significant materialising
of second-round effects and I do not see un-anchoring of inflation
expectations. But this is no time for complacency.”

The stats office is due to release final German inflation data on
May 11.

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

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