Saxony CPI

November: -0.1% m/m, +2.6% y/y
October: +0.2% m/m, +2.7% y/y
—
Pan-German CPI

MNI median forecast: flat m/m, +2.4% y/y
MNI forecast range: -0.1% m/m to +0.1% m/m

October: flat m/m, +2.5% y/y
—

BERLIN (MNI)- Consumer prices in the eastern German state of
Saxony fell back 0.1% in November, dampening the annual inflation rate
to +2.6% from +2.7%, the state statistics office said Monday.

The monthly result is below the median forecast of a flat reading
for pan-German CPI in a MNI survey of analysts.

Downward pressure on monthly consumer prices in Saxony came from
packaged holiday tours and airline tickets, which both dropped 3.4%, and
hotel and restaurant services, which fell 0.9%. Clothing and shoes were
0.2% cheaper than a month ago and alcoholic drinks and tobacco products
were down 0.4%.

Energy price developments were mixed, with motor fuel prices down
0.6% on the month, electricity and gas prices unchanged on the month,
and heating oil prices up 2.9%.

Food prices were up 0.5% on the month, with seasonal produce up
2.8%.

Annual price developments were driven mainly by energy price
increases. Heating oil rose 28.7%, motor fuel 10.8%, gas 6.2% and
electricity 4.6%. Food prices climbed 2.7%, with seasonal produce down
6.0%. Clothing and shoes rose 4.6%.

CPI excluding energy and seasonal food was down 0.1% on the month
and 1.9% on the year.

Inflation pressures in Germany are expected to ease over the coming
months on the back of a deteriorating domestic and global economic
outlook.

Analysts note that growth of input prices has already slowed over
recent months. Moreover, business expectations for selling prices have
been falling.

Finance Minister Wolfgang Schaeuble last week cautioned that
Germany’s growth outlook “is no longer as favorable as it appeared half
a year ago. That is the big worry.”

The Finance Ministry forecast last week that the economic upswing
will likely slow markedly in the fourth quarter. Due to moderating
global growth, inflation pressures will likely ease as well, it said.

The Bundesbank said last week that the economy is set to run into
difficult cyclical headwinds in the coming months, yet there are few
signs to suggest the economy is heading for a recession.

The central bank forecast a slowdown in economic growth for the
coming year to 0.5% to 1.0%, which it said would result in a shift from
external to domestic growth forces.

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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