Bavaria CPI

December: +0.9% m/m, +2.2% y/y
November: -0.1% m/m, +2.1% y/y

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Pan-German CPI

MNI median forecast: +0.6% m/m, +1.9% y/y
MNI forecast range: -0.1% to +1.1% m/m

November: -0.1% m/m, +1.9% y/y

FRANKFURT (MNI) – Consumer prices in the German state of Bavaria
rebounded 0.9% in December, as costlier package holidays and seasonal
food offset cheaper energy, lifting the annual inflation rate 0.1
percentage point to +2.2%, the state statistics office said Wednesday.

Household energy prices fell 1.0% in December on the back of
cheaper heating oil (-6.5%), cutting the annual rate to +3.2% from
November’s +3.9%. Motor fuel prices (-1.6%) also fell sharply, though
base effects boosted the annual rate by one percentage point to +3.6%.
Excluding heating oil and motor fuel prices, core CPI increased 1.1% on
the month and was up 2.1% on the year.

Higher prices for leisure activities (+5.6%) fueled the monthly
change in overall CPI. Services fees were up 2.9%, with significant
gains for package holiday tours (+22.8%). Restaurant and hotel prices
(+5.5%) also had an impact, boosted by a sharp gain for (+21.9%)
vacation lodgings.

Food was 1.1% more expensive on the month, with seasonal food
prices up 3.9%. Clothing and shoes prices were up 0.8%, while apartment
rents and utility costs fell 0.3%.

Besides energy and seasonal food, annual inflation was driven by
transport costs (+2.2%) and leisure prices (+3.2%).

Pipeline price pressures remain fairly tame. Domestic producer
prices fell to a three-month low in November, while import prices rose
at the weakest annual rate in two years. The recent recovery in the
euro/dollar exchange rate could help dampen imported inflation further
in the coming months.

The December PMI poll showed input costs rising at the slowest pace
since August, while output prices declined slightly amid stiff
competition for market shares.

The Bundesbank expects German HICP inflation to slow from an
average of +2.1% in 2012 to +1.5% this year, then accelerate modestly to
+1.6% in 2014. Energy policy reforms may add 0.3 point to CPI this year,
it estimated.

For detailed information see data table on MNI MainWire.

— Frankfurt bureau: +49 69 720 142; email: frankfurt@mni-news.com —

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