Final HICP
November: -0.2% m/m, +1.9% y/y (revised from -0.1%/+2.0%)
October: +0.1% m/m, +2.1% y/y
Final CPI
November: -0.1% m/m, +1.9% y/y (unrevised)
October: flat m/m, +2.0% y/y
—
FRANKFURT (MNI) – German EU-harmonized consumer price inflation in
November slowed to less than +2% for the first time since July, while
annual national rate was confirmed at +1.9%, the Federal Statistical
Office reported Wednesday.
After steadying at an annual rate of +2.1% in October, HICP
inflation slowed to +1.9% in November, 0.1 percentage point below the
preliminary estimate. The monthly change was also revised down 0.1
percentage point to -0.2%, its lowest rate since June.
In national terms, prices were down 0.1% on the month, in line with
the preliminary estimate.
With Brent crude down 2% on the month, household energy prices fell
0.3%, dampening the annual rise to 4.1%. The sharpest slowdown in annual
rates was for heating oil (+4.0% after +11.3% in October). Gas price
inflation slowed modestly (+3.0% after +3.2%), while the annual rate for
electricity was unchanged (+3.1%).
Motor fuel prices fell 2.7% on the month, resulting in an annual
rise of +3.0% and further reducing overall transport cost annual
inflation to +2.0% after +2.7% in October.
Brent crude prices remained on a downward trend through the start
of December, hitting a three-week low late last week. Subdued economic
prospects should continue to weigh on oil prices, barring a dramatic
resurgence of tensions in the Middle East.
German households will still feel the pinch of higher energy costs,
however, as a result of policy shifts and higher subsidies for renewable
sources. The Bundesbank expects electricity fees to rise by around 10%
at the beginning next year, which would contribute 0.3 percentage point
to consumer price inflation.
The core inflation rate, which excludes energy, was flat on the
month and 1.6% higher on the year, the same annual rate as in October.
Ahead of the holiday season, package vacations were 1.2% cheaper on
the month to give an annual rise of 4.2%. Overall leisure prices fell
0.4% on the month and were 2.1% higher on the year.
Food and non-alcoholic beverage prices increased 1.3% on the back
of costlier fruit (+4.0%), vegetables (+2.2%) and meat products (+1.3%),
bringing the annual rise to 4.0%. Food prices alone were up 4.2% on the
year.
Clothing and shoe prices were 0.3% lower on the month and up 2.1%
on the year.
The November PMI polls flagged moderate pipeline price pressures.
with input costs slowing in industry and services, while prices charged
declined slightly.
A European Commission survey showed selling price expectations
declining in the services and construction in November, stable in
industry and rising in the retail sector. Expectations were above
long-term averages everywhere except for industry.
The Bundesbank expects HICP inflation to slow from an average of
+2.1% this year to +1.5% next year, then pick up slightly to +1.6% in
2014. Core inflation is seen easing from +1.6% this year to +1.4% in
2013, before accelerating +1.8% in 2014 on the back of recent wage
agreements.
The Commission expects German HICP inflation to average +2.1% this
year and ease to +1.9% in 2013 and to +1.8% in 2014.
“The contribution of energy to inflation is expected to fall once
again, despite an increase in the surcharge on electricity prices for
feeding-in renewable energy,” the Commission said. “Headline inflation
is therefore forecast to remain below 2% as of next year, after 2.1% in
2012.”
— Frankfurt bureau: +49 69 720 142; email: twailoo@mni-news.com —
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