September: Flat m/m, +2.5% y/y
August: Flat m/m, +2.2% y/y
—
Pan-German CPI

MNI median forecast: -0.1% m/m, +2.5% y/y
MNI forecast range: -0.3% to +0.1% m/m

August: Flat m/m, +2.4% y/y

BERLIN (MNI) – Consumer prices in the German state of Bayern
remained flat in September, with the annual inflation rate rising
to +2.5% from +2.2% reported in August, the state statistics
office said Wednesday.

The monthly result is marginally above the median forecast of
-0.1% for pan-German CPI in a MNI survey of analysts.

As seen across other states in Germany, much of the upside cost
pressure came from strong gains in clothing and shoes (+4.4% m/m).

Downward pressure on monthly inflation came from a 10.9% fall
in restaurant and hotel services.

On the energy side, heating oil rose 4.4%, with motor fuel up
3.2% and household energy costs gaining 0.9%.

Food prices were flat on the month with seasonal produce down 1.7%.

In the annual comparison, heating oil prices rose 23.9%, motor fuel
prices 15.0%, household energy +9.6%. Food prices rose 2.2%, while
seasonal produce fell 8.3%. Clothing and shoes were up 2.2%.

CPI excluding heating oil and motor fuel fell 0.2% on the month and
was up 1.8% on the year.

Inflation pressures in Germany are expected to ease in the near
future on the back of a deteriorating economic outlook.

Due to slowing global growth, energy and crude oil prices should
decline slightly, the finance ministry predicted last week. “Thus, in
the further course of the year a gradual easing of inflation can be
expected,” it said.

The ministry pointed to signals for slowing industry growth ahead.
“Looking at leading indicators, one can expect a rather moderate pace
for the overall economy in the remainder of the year,” it said.

Economics Minister Philipp Roesler said Monday that the risks for
the domestic economy have risen markedly but a recession is still not to
be expected.

The minister pointed to dangers from the turbulence in financial
and foreign exchange markets, the Eurozone debt crisis and the slowing
of the global economy.

Business morale in Germany fell in September to its lowest level
since June 2010, with businesses revising down their assessments of both
the current situation and the near-term outlook in Germany, the Ifo
institute reported on Monday.

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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