Bavaria CPI

September: +0.1% m/m, +1.4% y/y
August: flat m/m, +1.4% y/y

—

Pan-German CPI

MNI median forecast: +0.1% m/m, +1.5% y/y
MNI forecast range: -0.1% to +0.2% m/m

August: flat m/m, +1.5% y/y

—

BERLIN (MNI) – Consumer prices in the western German state of Bavaria rose
0.1% in September, keeping the annual inflation rate unchanged at +1.4%, the
state statistics office said Friday.

The monthly result is in line with the median forecast of +0.1% for
pan-German CPI in a MNI survey of analysts. Earlier today, Saxony posted a flat
inflation reading.

Due to the end of the summer holiday season, prices for package holiday
tours in Bavaria slumped 11.4% on the month. Restaurant and hotel services,
however, rose 0.2%.

Food prices were 0.1% more expensive than a month ago.

The end of summer clothing discounts pushed prices for clothing and shoes
up 5.6%.

On the energy side, heating oil rose 5.2%, motor fuel climbed 0.8% and
household energy was also up 0.8%.

In the annual comparison, heating oil fell 4.1% and motor fuel was down
6.3% while household energy rose 4.4%.

Foodstuffs were 4.7% more expensive than a year ago. Clothing and shoes
were up 1.9.

CPI excluding heating oil and motor fuel was flat on the month and up 1.9%
on the year.

Inflation pressure in Germany is seen remaining tame over the coming months
given that declining input costs have improved operating margins and eased
pressure on manufacturers to raise output prices.

The Finance Ministry in its latest monthly report released last week
forecast for the rest of the year only weak inflation, given the “very moderate”
increase of producer prices and import prices.

“Especially the drop of energy product prices has a dampening impact,” the
ministry pointed out.

The Berlin-based DIW economic research institute last week forecast an
inflation rate of less than 2% for this year.

The European Central Bank currently sees “no inflation pressure” in the
Eurozone, ECB Executive Board member Joerg Asmussen said Wednesday in a speech
in the German capital. “Long-term inflation expectations are firmly anchored,”
he added.

“Today we have a situation where we have an expansive monetary policy [in
the Eurozone] and it will stay expansive for as long as necessary,” said
Germany’s representative in the ECB board. “We are in a different economic
situation than the US.”

–For detailed information see data table on MNI MainWire.

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

[TOPICS: MAGDS$,M$E$$$,M$G$$$,M$X$$$,M$XDS$]