Germany: Inflation rises following three months of decline
May 14, 2014
In April, consumer prices fell 0.2% over the previous month, confirming the preliminary estimate released by the Federal Statistics Office (Destatis) on 29 April. The fall contrasted the 0.3% rise observed in March and mainly reflected lower prices for food and for non-alcoholic beverages.
Despite the monthly fall, annual headline inflation rose from 1.0% in March to 1.3% in April, which fell just short of the 1.4% rate the market had expected. The annual print marked the first increase in inflation following three consecutive months of decline. In April, annual average inflation was unchanged at March's 1.4%.
Meanwhile, annual HICP inflation (based on the harmonized index of consumer prices) rose from 0.9% in March to 1.1% in April. Annual average HICP inflation remained at March's 1.4% in April.
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