Flash July HICP: +0.5% m/m, +2.6% y/y

MNI median forecast: +0.3% m/m, +2.4% y/y
MNI forecast range: +0.2% to +0.5% m/m

Final June HICP: +0.1% m/m, +2.3% y/y
————–
Flash July CPI: +0.4% m/m, +2.4% y/y

MNI median forecast: +0.3% m/m, +2.3% y/y
MNI forecast range: +0.1% to +0.5% m/m

Final June CPI: flat m/m, +2.4% y/y
————–

BERLIN (MNI) – German consumer prices rose 0.4% in July in national
terms and 0.5% in EU-harmonized terms, with annual rates standing at
+2.4% for CPI and +2.6% for HICP, the Federal Statistical Office
estimated Wednesday.

The median forecasts in a MNI survey of analysts were for a 0.3%
monthly rise of both CPI and HICP.

As usual, the Federal Statistics Office provided few details on
price developments with the flash release. State data showed gains in
energy, leisure and entertainment prices, which offset cheaper food and
clothing.

As yet there are few signs of second-round effects in Germany. With
economic growth expected to cool over the course of the year and oil
prices off their peaks, inflation pressures should ease somewhat over
the medium term.

The Finance Ministry estimated last week that economic growth
weakened markedly in the second quarter. “Leading indicators signal that
in the further course of the year a flatter growth path is to be
expected as well,” it added.

Due to moderating foreign demand for German industrial goods,
industry growth will likely slow through the rest of the year, the
ministry said.

Private consumption is also showing some signs of vulnerability,
which might make it harder for businesses to pass on higher costs to
consumers.

The ongoing sovereign debt crisis and the “lack of discernable
strategy” on how to resolve it are weighing, albeit slightly, on
consumer morale, the GfK Group said on Tuesday.

“Despite the fact that general conditions for domestic demand in
Germany remain very positive, they are not fully compensating for this
uncertainty,” GfK said. As a result, the consumer climate indicator was
projected to fall to 5.4 in August from a downwardly revised 5.5 (5.7)
in July.

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

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