Bavaria CPI

March: +0.4% m/m, +1.4% y/y
February: +0.7% m/m, +1.4% y/y

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Pan-German CPI

MNI median forecast: +0.4% m/m, +1.4% y/y
MNI forecast range: +0.2% to +0.6% m/m

February: +0.6% m/m, +1.5% y/y

—

BERLIN (MNI) – Consumer prices in the western German state of Bavaria rose
0.4% in March, leaving the annual inflation rate unchanged at +1.4%, the state
statistics office said Tuesday.

The monthly result is in line with the median forecast of +0.4% for
pan-German CPI in a MNI survey of analysts. Hesse posted earlier today monthly
inflation of +0.3%, Brandenburg and Baden-Wuerttemberg both registered +0.4%
rates, North Rhine-Westphalia had monthly inflation +0.5% and Saxony of +0.6%.

Due to the Easter holidays, prices for packaged holiday tours spiked 5.6%
on the month, while restaurant and hotel services only rose 0.2%.

After the end of the winter sales period, clothing and shoes were 5.9% more
expensive than a month earlier. Food prices climbed 1.4%.

Downward pressure on monthly inflation came from energy prices. Motor fuel
fell 3.7%, heating oil was down 2.8% and household energy fell 0.3%.

In the annual comparison, motor fuel fell 6.6% and heating oil was down
6.4%, while household energy rose 5.0%. Food prices climbed 3.2%. Clothing and
shoes were 2.9% more expensive than a year ago.

CPI excluding heating oil and motor fuel rose 0.6% on the month and 1.9% on
the year.

Inflation pressure in Germany is seen remaining moderate in the near
future. Analysts note that business surveys still signal below-trend rates of
growth, which means there will remain significant spare capacity in the economy.
The Finance Ministry in its latest monthly report forecast inflation to remain
tame over the coming months.

The EU Commission recently projected German inflation to slow to 1.8% this
year and to 1.7% in 2014. “While higher labor costs should gradually be passed
on to consumers, the assumed decline in commodity prices tends to lower price
pressures,” it reasoned.

Price pressures in the Eurozone are low at the moment, European Central
Bank Executive Board member Joerg Asmussen said recently. Inflation should fall
below 2% over the next months and long-term inflation expectations are firmly
anchored, he remarked. “We see no inflation pressure currently, but you can be
assured that if we saw inflation pressure, we would act immediately,” the
central banker stressed.

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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