Germany: Inflation rises in June
July 10, 2013
In June, consumer prices added 0.1% over the previous month, confirming the preliminary estimate released by the Federal Statistics Office (Destatis) on 28 June. The reading was below the 0.4% increase registered in May and mainly reflected that higher food prices compensated for lower energy costs, primarily heating oil.
Annual headline inflation rose from 1.5% in May to 1.8% in June, which marks the highest level since December 2012. Despite the faster annual increase, annual average inflation stabilized at 1.8%, as observed in both May and April.
Meanwhile, annual HICP inflation (based on the harmonized index of consumer prices) rose to 1.9% in June (May: 1.6% year-on-year). Annual average HICP inflation remained unchanged at May's 1.9%.
The Bundesbank expects inflation to average 1.6% in 2013, before inching down to 1.5% in 2014. FocusEconomics panellists also expect inflation to average 1.6% in 2013, which is unchanged from the previous month's forecast. For 2014, panellists expect inflation to increase to 1.8%.
Author: Ricardo Aceves, Senior Economist