North Rhine-Westphalia CPI

July: +0.4% m/m, +2.7% y/y
June: +0.2% m/m, +2.5% y/y
—
Pan-German CPI

MNI median forecast: +0.3% m/m, +2.3% y/y
MNI forecast range: +0.1% to +0.5% m/m

June: flat m/m, +2.4% y/y
—

BERLIN (MNI) – Consumer prices in the western German state of
North-Rhine Westphalia rose 0.4% in July, lifting the annual inflation
rate to +2.7% from +2.5% in June, the state statistics office said
Wednesday.

The monthly result was above the +0.3% median forecast for
pan-German CPI in an MNI survey of analysts. Earlier today, Brandenburg
and Hesse posted monthly inflation rates of 0.5% and Saxony of 0.4%.
This suggests that pan-German inflation will be higher than expected.

Due to the start of the summer holiday season, prices for package
holiday tours and airline tickets in NRW spiked 10.5% and 14.7% on the
month, respectively. Restaurant and hotel services were up 2.9%.

On the energy side, heating oil prices rose 1.4% on the month,
motor fuel was up 0.8% and gas up 1.0%, while electricity was unchanged.

Food prices rose 0.2% on the month, with seasonal food prices alone
down 1.6%. Clothing and shoes were 3.7% cheaper than a month ago.

In the annual comparison, heating oil prices rose 25.7%, motor fuel
12.5%, electricity 7.7% and gas 5.7%. Airline tickets were 15.6% more
expensive than a year ago, package holidays were up 2.9% and hotel and
restaurant services up 2.2%.

Prices for clothing and shoes rose 3.0% on the year. Food prices
were up 2.2%, with seasonal food prices down 4.4%.

CPI excluding seasonal food rose 0.5% on the month and 2.9% on the
year. CPI ex-heating oil and motor fuel climbed 0.5% on the month and
2.1% on the year.

As yet there are few signs of emerging second-round effects in
Germany. With economic growth expected to cool over the course of the
year and oil prices off their peaks, inflation pressures should ease
somewhat over the medium term.

The Finance Ministry estimated last week that economic growth
weakened markedly in the second quarter. “Leading indicators signal that
in the further course of the year a flatter growth path is to be
expected as well,” it added.

Due to moderating foreign demand for German industrial goods,
industry growth will likely slow through the rest of the year, the
ministry said.

Private consumption is also showing some signs of vulnerability,
which might make it harder for businesses to pass on higher costs to
consumers.

The ongoing sovereign debt crisis and the “lack of discernable
strategy” on how to resolve it are weighing, albeit slightly, on
consumer morale, the GfK Group said on Tuesday.

“Despite the fact that general conditions for domestic demand in
Germany remain very positive, they are not fully compensating for this
uncertainty,” GfK said. As a result, the consumer climate indicator was
projected to fall to 5.4 in August from a downwardly revised 5.5 (5.7)
in July.

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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