Final HICP
March: +0.6% m/m +1.2% y/y

Final CPI
March: +0.5% m/m, +1.1% y/y
—

BERLIN (MNI) – Germany’s harmonized annual inflation rate rose 1.2%
in March, the Federal Statistical Office said Tuesday, revising down its
flash estimate of a 1.3% rise.

The stats office, however, confirmed the flash estimate of the
monthly rise of +0.6%.

Germany’s national CPI was unrevised on the flash estimate at +0.5%
m/m and +1.1% y/y.

Upward pressure on monthly consumer prices came mainly from price
hikes for motor fuel (+5.7%), light heating oil (+7.4%) and electricity
(+0.4%). Prices for food (+1.0) as well as for clothing and shoes
(+1.8%) were also higher. Bucking the trend for higher energy prices,
gas prices were down 0.1%.

Year-on-year price developments were also driven mainly by price
hikes for motor fuel (+19.4%), light heating oil (+32.1%) and
electricity (+3.0%).

Food prices were up 0.3%. It was the first annual rise of food
prices since March 2009, the stats office noted. Downward pressure came
mainly from prices for gas (-19.1%).

Core inflation remained tame in March. CPI ex-heating oil and motor
fuel was up 0.2% on the month and rose 0.3% on the year.

Analysts expect headline inflation to stabilise at current levels
due to rising energy and food prices. Core inflation, however, is seen
on a downward trend.

The current slack in the German economy and a clouded outlook for
consumer spending leave firms little leeway for price hikes. With
unemployment expected to rise throughout the year, wage growth in all
likelihood will remain very moderate.

To underline this, Germany’s largest trade union, IG Metall,
recently settled for a moderate pay rise in the important metalworking
and engineering industry.

Bundesbank President Axel Weber predicted last month that price
levels in Germany will rise only very moderately given the fairly
subdued nature of the recovery.

For detailed information see data table on MNI MainWire.

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

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