Flash Oct HICP: +0.1% m/m, +2.1% y/y

MNI median forecast: flat m/m, +2.0% y/y
MNI forecast range: -0.1% to +0.1% m/m

Final Sep HICP: flat m/m, +2.1% y/y
Flash Oct CPI: flat m/m, +2.0% y/y

MNI median forecast: flat m/m, +2.0% y/y
MNI forecast range: -0.1% to +0.1% m/m

Final Sep CPI: flat m/m, +2.0% y/y

BERLIN (MNI) – German consumer prices in October remained unchanged
in national terms and rose 0.1% in EU-harmonized terms, with annual
rates standing at +2.0% for CPI and +2.1% for HICP, the Federal
Statistical Office (FSO) estimated Monday.

The median forecasts in a MNI survey of analysts were for a flat
reading of both CPI and HICP.

As usual, the Federal Statistics Office provided no details on
price developments with the flash release. Data from the reporting
states showed that energy inflation eased in October. The final result
will be released on November 9.

The Finance Ministry said last week it expected only moderate
inflation in Germany over the coming months given the subdued global
economic trends. In its latest economic forecast released earlier this
month, the government predicted inflation of 2.0% this year and 1.9%
next year.

Import prices in Germany fell back in September due to declines in
most major components led by energy.

Some analysts, however, expect inflation in Germany to pick up over
the medium term given that monetary policy in the Eurozone is too
expansionary for Germany.

Pipeline price pressures seem to be mounting in the private sector,
the PMI polls suggest, with input costs seeing another moderate rise in
October (55.0). Pricing-power, by contrast, remained subdued due to
strong competition and weaker demand. Output prices increased only
slightly in October (50.7) after three months of marginal decline.

While stronger wage growth could lead to inflation risks down the
road, Pier Carlo Padoan, chief economist with the Organisation for
Economic Cooperation and Development, argued recently that Germany
should consider raising its inflation tolerance to help debtor Eurozone
members better adjust.

By accepting higher wage inflation, creditor countries like Germany
could provide a boost to debtor countries via increased consumption,
while lower wages would allow the Eurozone’s debtor nations to be more
competitive, Padoan said.

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

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