North-Rhine Westphalia CPI

February: +0.6% m/m, +2.1% y/y
January: -0.5% m/m, +2.0% y/y
—
Pan-German CPI

MNI median forecast: +0.5% m/m, +2.1% y/y
MNI forecast range: +0.4% to +0.7% m/m

January: -0.4% m/m, +2.0% y/y
—

BERLIN (MNI) – Consumer prices in the western German state of
North-Rhine Westphalia rose 0.6% in February, lifting the annual
inflation rate to +2.1% from +2.0% in January, the state statistics
office said Friday.

The monthly result was above the +0.5% median forecast for
pan-German CPI in an MNI survey of analysts. Earlier today, Brandenburg
and Hesse also posted a monthly CPI rise of 0.6%, while consumer prices
in Saxony climbed 0.5%.

As in the other states, upward pressure on monthly inflation in NRW
came from food prices (+0.7%), especially seasonal food prices (+2.6%)
and fruits (+3.8%). On the energy side, increases were seen for heating
oil (+2.5%), motor fuel (+0.7%), electricity (+0.5%) and gas (+0.2%).

Packaged holiday tours jumped 7.3% and airline tickets climbed
2.8%. Hotel and restaurant services were up 0.8%. Clothing and shoes
climbed 1.6%.

Annual inflation was again marked by the upward surge of energy and
food prices. Heating oil prices rose 32.0% on the year, motor fuel
12.1%, electricity 6.7% and gas 4.7%. Food prices climbed 3.0%, with
seasonal food up 7.8% and fruits up 9.4%.

Underlying inflation remained relatively moderate in February. CPI
excluding heating oil and motor fuel rose 0.6% on the month and 1.5% on
the year.

While analysts acknowledge that there exist upside risks to
inflation, they see little danger of a price-wage spiral at the moment.

Economics Minister Rainer Bruederle said earlier this week that
rising energy prices do not yet risk spawning second-round inflation
effects in Germany. “This is always a risk, but I hope that it will stay
contained,” he added.

However, Bundesbank Board member Andreas Dombret cautioned Thursday
that elevated inflation in Germany and the Eurozone might prove more
stubborn this year than initially assumed.

“Higher inflation could definitely prove more persistent than
assumed up to now,” the central banker warned. “Second-round effects
also cannot be ruled out.”

The price climate in Germany and the Eurozone has clearly worsened
due to global trends for energy, commodities and food, Dombret pointed
out.

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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