Germany: Inflation falls to lowest level in over two years
April 2, 2013
In March, consumer prices rose 0.5% over the previous month, according to a preliminary flash estimate released by the Federal Statistics Office (Destatis) on 2 April. The print followed the 0.6% increase observed in February. Despite the monthly increase, annual headline inflation fell from 1.6% in February to 1.4% in March, which represents the lowest level since December 2010. In addition, the reading came in below market expectations that had inflation slowing to 1.5%. Annual average inflation remained unchanged at February's 1.9%. Meanwhile, annual HICP inflation (based on the harmonized index of consumer prices) remained stable at the 1.8% observed in February, the lowest level since November 2010. The Bundesbank expects inflation to average 1.5% in 2013, before inching up to 1.6% in 2014. FocusEconomics panellists expect inflation to average 1.8% in 2013, which is unchanged from the previous month's forecast. For 2014, panellists expect inflation to increase to 1.9%.
Author: Ricardo Aceves, Senior Economist