Germany: Inflation falls to six-month low in October
November 11, 2013
In October, consumer prices fell 0.2% over the previous month, confirming the preliminary estimate released by the Federal Statistics Office (Destatis) on 31 October. The reading followed September's flat figure and came in on par with market expectations. According to Destatis, the decrease reflected lower prices for package holidays as well as for air travel.
Annual headline inflation fell from 1.4% in September to 1.2% in October, the lowest rate since April. In October, annual average inflation inched down from September's 1.7% to 1.6%.
Meanwhile, annual HICP inflation (based on the harmonized index of consumer prices) declined to 1.2% in October (September: 1.6% year-on-year). Annual average HICP inflation edged down from 1.8% in September to 1.7% in October.
The German Central Bank expects inflation to average 1.6% in 2013, before inching down to 1.5% in 2014. FocusEconomics panelists expect inflation to average 1.6% in 2013, which is unchanged compared to the previous month's forecast. For 2014, panelists expect inflation to increase to 1.8%, which is also unchanged over last month's estimate.
Author: Ricardo Aceves, Senior Economist