Final HICP

April: +0.1% m/m, +2.2% y/y (+0.2% m/m, +2.2% y/y)
March: +0.4% m/m, +2.3% y/y

Final CPI

April: +0.2% m/m, +2.1% y/y (revised from +0.1% m/m, +2.0% y/y)
March: +0.3% m/m, +2.1% y/y
—

FRANKFURT (MNI) – German inflation eased to 2.2% in April in
EU-harmonized terms from 2.3% in March, the Federal Statistical Office
reported on Friday, confirming its flash estimate.

The annual CPI rate was revised up to 2.1% from the previous
estimate of 2.0%. Inflation has remained above 2% since February 2011.

While Brent crude prices fell more than 5% in April, motor fuels
still rose 1.2% on the month and were 6.3% higher on the year. Excluding
energy, core prices rose 0.1% on the month and 1.5% on the year.

Amid political uncertainty in Greece and growth concerns in the
Eurozone, oil prices slipped to three-month lows earlier this week
before partially retracing losses.

Should Brent stabilize at current levels, upward pressure from
energy on annual inflation rates should ease, despite the base effects
from the dip in oil prices in May 2011.

Food and non-alcoholic beverage prices were up 0.2% on the month
and 4.2% higher on the year. Household energy was flat month-over-month
while rising 5.0% year-on-year. Prices for clothing and shoes rose 0.2%
on the month for a 4.2% annual gain.

April’s PMI polls showed input prices in the private sector
continuing to rise at a robust pace, while output price inflation
remained subdued, slowing to weakest rate since the start of the year.

Suggesting that pipeline pressures could remain subdued in the near
term, an Ifo survey published last month indicated that selling-price
expectations in the retailing, wholesaling and construction sectors were
all revised downward.

Nevertheless, households’ inflation concerns increased in April,
fueled by higher petrol prices, a GfK survey showed. This has dampened
consumers’ income expectations.

“Consumers view their purchasing power as being compromised, as an
ever greater proportion of their income is spent on energy, particularly
on petrol and diesel, and is therefore not available for other
purchases,” GfK said.

Bundesbank President Jens Weidmann has warned that domestic
inflation may exceed well exceed 2%, as Eurozone policy rates will
likely remain too low for Germany’s robust economy.

Finance Minister Wolfgang Schaeuble said in a weekend newspaper
interview that he was not worried about wages in Germany rising faster
than in other countries, since this would contribute “to reducing
imbalances in Europe.”

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

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