Hesse CPI

June: +0.1% m/m, +0.8% y/y
May: flat m/m, +0.8% y/y
—
Brandenburg CPI

June: flat m/m, +0.5% y/y
May: +0.2% m/m, +1.0% y/y
—
Pan-German CPI

MNI median forecast: +0.1% m/m, +0.9% y/y
MNI forecast range: -0.1% to +0.2% m/m

May: +0.1% m/m, +1.2% y/y
—

BERLIN (MNI) – Monthly consumer prices in June were unchanged in
the western German state of Hesse and increased 0.1% in the eastern
German state of Brandenburg, the respective state statistics offices
said Monday.

The median pan-German forecast for monhtly CPI in June in a MNI
survey of analysts is for 0.1% rise. Saxony had posted on Friday a
monthly price rise of 0.1%.

Annual inflation rates were positive both in Hesse (+0.5%) and
Brandenburg (+0.8%).

Due to the upcoming start of the holiday season, prices for
packaged holiday tours, hotel and restaurant services went up in a
monthly comparison in both Brandenburg and Hesse.

Food prices, however, were up in Brandenburg and down in Hesse.
Energy price components were down or flat in Brandenburg, while they
were unchanged in Hesse except for a rise of heating oil prices.

In an annual comparison, in both states heating oil prices, motor
fuel and electricity were up, while gas prices dropped.

Inflation rates will likely remain near their current levels for
the coming months given the huge spare capacity in the German economy.
Wage growth in all likelihood will remain subdued. Trade unions so far
this year have settled for moderate wage deals.

Deflation risks are still relatively low, analysts argue, noting
that the weak euro exchange rate is making imports more expensive. They
also point out that corporate selling price expectations have turned
around recently.

Others, however, reckon that imported inflation is offset by strong
downward pressure on underlying domestic prices and warn that deflation
remains a threat for the Eurozone as a whole.

The Bundesbank earlier this month forecast German average inflation
of +1.2% this year and +1.6% next year.

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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