North Rhine-Westphalia CPI

July: +0.4% m/m, +1.3% y/y
June: -0.1% m/m, +1.3% y/y
—
Pan-German CPI

MNI median forecast: +0.4% m/m, +1.7% y/y
MNI forecast range: +0.2% to +0.6% m/m

June: -0.1% m/m, +1.7% y/y
—

BERLIN (MNI) – Consumer prices in the western German state of
North Rhine-Westphalia rose 0.4% in July, keeping the annual inflation
rate unchanged at +1.3%, the state statistics office said Thursday.

The monthly result is in line with the median forecast of +0.4% for
pan-German CPI in a MNI survey of analysts.

Energy price developments were mixed in July. Heating oil prices
rose 4.2% on the month and motor fuel climbed 1.4% while gas and
electricity remained unchanged.

Food prices fell 0.6% with seasonal produce down 3.6%. Clothing and
shoes were down 4.4%.

Due to the holiday period, airline tickets were up 8.7% and package
holiday tours rose 14.9%. Hotel and restaurant services climbed 2.2%.

Annual price developments were again marked by energy prices. Gas
was up 5.3%, heating oil rose 5.2%, electricity climbed 3.2% and motor
fuel was up 2.1%.

Food prices rose 2.4% with seasonal produce up 3.9%.

CPI excluding seasonal food was up 0.4% on the month and 1.2% on
the year. CPI-ex heating oil and motor fuel rose 0.3% on the month and
1.1% on the year.

Pointing to easing commodity prices due to moderating global
economic growth, the German Finance Ministry said last week that “there
is no inflation risk at the moment for Germany from current price
developments on global markets.”

Import prices in Germany fell for the third consecutive month in
June on the back of ever cheaper energy products, bringing annual
inflation to its lowest level since 2009, the Federal Statistical Office
reported earlier on Thursday.

Deepening May’s decline, June’s 1.5% monthly fall knocked overall
import prices down to their lowest level for the year and the annual
rate to +1.3%, its slowest pace since December 2009.

Modest global economic growth and demand are likely to limit oil
price gains in the coming months, the International Energy Agency said
in its latest Oil Market Report. Yet prices could still remain high in
absolute terms due to ongoing supply-side risks and potential emerging
market demand, the IEA warned.

The uncertainty surrounding economic developments in general and
inflation in particular in Germany and elsewhere is posing significant
challenges for monetary policy, the Bundesbank said in its latest
monthly report released Monday.

“The crisis in the Eurozone is dampening the German economy more
heavily than previously expected,” the DIW economic research institute
warned earlier this month, adding, though, that a recession was not
expected.

German business confidence eroded more than generally expected in
July to its lowest level since early 2010, as firms adjusted downward
their assessment of both the current situation and the near-term
outlook, the Ifo institute reported on Wednesday.

European Central Bank president Mario Draghi said earlier this
month that the Eurozone “inflation path is moving favourably” towards
the ECB’s medium-term inflation goal of close to but below 2%.

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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