Baden-Wuerttemberg CPI

June: +0.1% m/m, +1.7% y/y
May: +0.5% m/m, +1.4% y/y

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Pan-German CPI

MNI median forecast: flat m/m, +1.7% y/y
MNI forecast range: +0.2% to +2.0% m/m

May: +0.4% m/m, +1.5% y/y

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BERLIN (MNI) – Consumer prices in the western German state of
Baden-Wuerttemberg rose 0.1% in June, lifting the annual inflation rate to +1.7%
from +1.4%, the state statistics office said Friday.

The monthly result is above the median forecast of a flat reading of
pan-German CPI in a MNI survey of analysts. Earlier today, Bavaria also posted a
0.1% rate while Hesse and North Rhine-Westphalia both registered inflation of
0.2%, making it more likely that preliminary pan-German inflation will come in
higher than expected.

Due to the start of the holiday season, prices for package holiday tours in
Baden-Wuerttemberg rose 5.0% on the month and airline tickets climbed 1.7%. Food
prices increased by 0.3%.

Energy price developments were mixed. Heating oil increased 0.7% while
motor fuel fell 0.8% and household energy remained unchanged.

In the annual comparison, household energy climbed 4.6% while motor fuel
fell 1.1% and heating oil decreased 2.0%.

Food prices climbed 5.1%, with vegetables up 10.9%.

Inflation pressure in Germany is seen remaining tame over the coming
months. Analysts still see below-trend growth and significant spare capacity in
the economy.

Moreover, declining input costs due to cheaper oil have improved operating
margins and eased pressure on manufacturers to raise output prices.

The Finance Ministry in its latest monthly report also forecast moderate
inflation rates in the near future. For the full year of 2013, the government
expects average inflation of 1.7%.

ECB President Mario Draghi said Tuesday that the exit from the central
bank’s accommodative policy stance “is still distant”, noting that inflation in
the Eurozone is low and unemployment is high.

For detailed information see data table on MNI MainWire.

–MNI Berlin Bureau; tel: +49 30-226-20580; email: twidder@mni-news.com

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