Germany: Inflation moderates in November
December 12, 2012
In November, consumer prices dropped 0.1% over the previous month, which confirmed the flash estimate released by the Federal Statistics Office (Destatis) on 28 November. The result came in below the flat reading observed in October and mainly reflected how lower prices for energy offset higher prices for food and non-alcoholic beverages. As a result of the monthly drop, annual headline inflation declined from 2.0% in October to 1.9% in November, which was in line with market expectations. Meanwhile, annual average inflation remained steady at October's 2.0%. Annual HICP inflation (based on the harmonized index of consumer prices) followed suit and fell from 2.1% in October to 1.9% in November. That said, annual average HICP remained unchanged at October's 2.2%. The Bundesbank expects inflation to fall to 1.5% in 2013 from an expected 2.1% in 2012. For 2014, the Bundesbank sees inflation inching up to 1.6%.
Author: Ricardo Aceves, Senior Economist