Hesse CPI

October: flat m/m, +2.4% y/y
September: +0.3% m/m, +2.3% y/y
—
Brandenburg CPI

October: +0.1% m/m, +2.4% y/y
September: -0.1% m/m, +2.3% y/y
—
Pan-German CPI

MNI median forecast: +0.1% m/m, +2.6% y/y
MNI forecast range: -0.1% to +0.1% m/m

September: +0.1% m/m, +2.6% y/y
—

BERLIN (MNI) – October consumer prices in the western German state
of Hesse were flat on the month and increased 0.1% on the month in the
eastern German state of Brandenburg, the respective state statistics
offices said Thursday.

The monthly CPI results of Brandenburg was in line with the median
pan-German forecast of +0.1% in an MNI survey of analysts while that of
Hesse was below it. North-Rhine Westphalia earlier posted a drop of 0.3%
while Saxony registered a 0.2% rise.

Annual inflation rates in October stood at +2.4% both in Hesse and
Brandenburg.

Upward pressure on monthly consumer price developments in Hesse and
Brandenburg came from clothing and shoes. Food prices rose in
Brandenburg and fell in Hesse, while seasonal produce remained unchanged
in Brandenburg and dropped in Hesse.

Energy price developments were mixed. In Brandenburg, gas prices
rose while electricity and heating oil was unchanged and motor fuel
fell. In Hesse, gas and heating oil were up while electricity was
unchanged and motor fuel fell.

Packaged holiday tours were down and hotel and restaurant services
were up in both states.

Annual price developments were driven mainly by energy price
increases. Prices for heating oil, motor fuel, gas and electricity all
were up in October.

Food prices also climbed in both states with seasonal produce down.
Clothing and shoes were more expensive than a year ago as well.

Inflation pressures in Germany are expected to ease over the coming
time on the back of a deteriorating economic outlook.

Business morale in Germany cooled further in October, reaching its
lowest level since July 2010, with businesses revising down their
assessments of both the current situation and the near-term outlook in
Germany, the Ifo institute reported last week. After a 7.0-point slide
since June, Ifo’s overall sentiment indicator fell another 1.0 point to
106.4.

Germany’s DIW economic research institute on Wednesday predicted a
stagnation of German GDP in the fourth quarter. Due to the Eurozone’s
sovereign debt crisis, German consumers as well as businesses will
likely delay long-term spending and investment decisions, the
Berlin-based institute said.

The German finance ministry said last week that while the recent
rise of core inflation in Germany might be partly due to firms passing
on higher labor costs to consumers, the weakening global economy will
likely lead to easing imported inflation pressure.

For detailed information see data table on MNI MainWire.

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

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