North Rhine-Westphalia CPI

June: +0.2% m/m, +2.1% y/y
May: +0.4% m/m, +1.7% 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

—

BERLIN (MNI) – Consumer prices in the western German state of North
Rhine-Westphalia rose 0.2% in June, lifting the annual inflation rate to +2.1%
from +1.7%, 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, Hesse and Bavaria
posted monthly inflation rates of 0.2% and 0.1%, respectively, 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
North Rhine-Westphalia rose 5.0% on the month. Restaurant and hotel services
climbed 0.2%.

Food prices increased by 0.3%, with fruits up 2.9% and vegetables down
1.7%.

Downward pressure on inflation came from clothing and shoes which were 1.5%
cheaper than a month ago.

Energy price developments were mixed. Motor fuel climbed 0.3% and gas rose
0.2% while electricity was flat and heating oil fell 0.3%.

In the annual comparison, electricity spiked 11.3%, gas rose 1.4% while
motor fuel fell 0.3% and heating oil decreased 2.3%.

Food prices climbed 5.9%, with fruits up 11.5% and vegetables up 9.2%.

Core inflation remained moderate in June. CPI excluding food and energy
rose 0.1% on the month and climbed 1.5% on the year.

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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