Germany: Inflation moderates in November
November 10, 2011
In November, consumer prices remained unchanged over the previous month, which confirmed the previous flash estimate released by the Federal Statistical Office (Destatis) on 28 November. The subdued reading followed the flat figure recorded in October and was in line with market expectations. According to Destatis, the unchanged reading in November reflected higher prices for heating oil (+4.4 month-on-month) and cut flowers (+3.5% mom), which were offset by lower prices for accommodation services (-3.9% mom) and package holidays (-3.4% mom). Compared to the same month last year, headline inflation edged down from 2.5% in October to 2.4% in November, which marked the tenth consecutive month that headline inflation lies above the European Central Bank's inflation target of ?below but close to 2%.? Meanwhile, HICP inflation dropped from 2.9% in October to 2.8% in November, which drove annual average HICP inflation to 2.4%. The Bundesbank expects inflation to average 2.5% this year, before moderating to 1.8% in 2012.
Author: Ricardo Aceves, Senior Economist