NRW CPI

December: +0.7% m/m, +1.7% y/y
November: -0.1% m/m, +2.1% y/y

—

Pan-German CPI

MNI median forecast: +0.8 m/m, +2.2% y/y
MNI forecast range: +0.6% m/m to +1.2% m/m

November: flat m/m, +2.5% y/y

—

FRANKFURT (MNI) – Consumer prices in Germany’s North
Rhine-Westphalia recovered in December on the back of costlier leisure,
food, hotel and restaurant services, which offset cheaper energy
products, the state’s statistics office reported on Wednesday.

As a result, overall prices were up 0.7% on the month following
November’s 0.1% dip, bringing the annual change to +1.7%. However, the
monthly and annual NRW figures were below expectations for national CPI
— +0.8% m/m and +2.2% y/y — and thus point to a possible downside
surprise for the country as a whole.

With Brent crude slipping more than 2% between November and
December, motor fuel prices were down 1.6% on the month, cutting the
annual gain to 4.2%. Heating oil was 3.2% lower than in November to give
a 18.4% rise y/y.

Excluding the effects from energy components, core CPI was up 0.8%
m/m and was 1.4% higher on the year.

After dipping 3.4% in November, package holiday prices jumped a
whopping 19.8% m/m, lifting overall leisure prices 4.5% and 1.0% on the
month and year, respectively.

Other strong gains were posted in food prices, which rose 0.9%
between November and December (+2.1% y/y), and hotel and restaurant
services, the prices for which rebounded 4.9% m/m (+2.0% y/y) following
November’s 0.6% slide.

A recent PMI report noted a further decline in German price
pressures, as manufacturers linked cheaper raw material to the third
consecutive dip in input prices, while “strong competitive pressures”
limited firms’ pricing power.

Nevertheless, the improving business outlook could give companies
room to hike prices further. According to an Ifo institute survey, the
proportion of manufacturers looking to raise selling prices in the near
term recovered in December to its highest level since the summer, after
a six-month decline.

Ifo forecasts average German CPI at 1.8% next year after 2.3% this
year. The Organisation for Economic Cooperation and Development sees
consumer inflation slowing to 1.6% next year from 2.4%.

— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —

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