Germany: Inflation jumps to three-year high
September 28, 2011
In September, consumer prices rose 0.1% over the previous month, according to a preliminary flash estimate released by the National Statistics Institute. The monthly reading contrasted the flat result observed in August (initially reported: -0.1% month-on-month) and the 0.1% fall registered in the same month last year. Owing to the monthly rise, inflation climbed from 2.4% in August to 2.6% in September. The reading, which marked the highest level since September 2008, overshot market expectations that had inflation remaining at 2.4%. According to the Institute, the higher inflation rate reflected elevated prices for fuel as well as clothing and footwear. At the current level, inflation continues to hover above the European Central Bank's inflation target of ?below but close to 2%.? HICP inflation followed suit and jumped from 2.5% in August to 2.8% in September. A complete and more detailed inflation data set will be published on 13 October. The German Central Bank projects inflation to average 2.5% this year, before moderating to 1.8% in 2012.
Author: Ricardo Aceves, Senior Economist