Germany: Inflation hits two-year high
December 9, 2010
In November, consumer prices rose 0.1% over the previous month, confirming the previous flash estimate, released by the National Statistics Office (Destatis) in late November. The reading contrasted market expectations of a 0.1% fall. Annual inflation increased from 1.3% in October to 1.5% in November, representing the highest level since October 2008. The increase in consumer prices over October mainly reflected seasonal factors, driven by higher prices for food and non-alcoholic beverages (October: -0.1% month-on-month; November: +0.9% mom), heating oil (October: +0.1% mom; November: +1.9% mom) and motor fuels (October: 0.2% mom; November: +0.9% mom). Annual harmonised consumer price inflation (HICP) jumped from 1.3% in October to 1.6% in November. The federal government estimates inflation will average 1.1% this year and 1.3% in 2011, while the Bundesbank expects inflation to rise to 1.2% this year and to 1.6% in 2011.
Author: Ricardo Aceves, Senior Economist