Germany: Inflation falls to lowest level in over three years
March 28, 2014
In March, consumer prices rose 0.3% over the previous month according to preliminary estimates released by the Federal Statistics Office (Destatis). The increase came in below the 0.5% rise observed in February and fell short of the 0.4% increase the market had expected. Annual headline inflation eased for the third consecutive month, falling from 1.2% in February to 1.0% in March, which undershot the 1.1% rate the market had expected and marked the lowest level since August 2010. In March, annual average inflation inched down from February's 1.5% to 1.4%. Meanwhile, annual HICP inflation (based on the harmonized index of consumer prices) fell from 1.0% in February to 0.9% in March; the result was on par with market expectations. Annual average HICP inflation also inched down, declining from February's 1.5% to 1.4% in March. The German Central Bank expects inflation to average 1.3% in 2014 before increasing to 1.5% in 2015. FocusEconomics panelists expect inflation to average 1.4% in 2014, which is down 0.1 percentage points from the previous month's forecast. For 2015, panelists expect inflation to increase to 1.9%.
Author: Ricardo Aceves, Senior Economist