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GERMANY-ECONOMY-INDICATOR-INFLATION
German inflation edges down in November
WIESBADEN, Germany, Nov 30, 2018 (BSS/AFP) – Inflation in Europe’s top
economy Germany dropped back in November but remained above the European
Central Bank’s target of just under two percent for a seventh month.
Prices rose 2.3 percent year-on-year, preliminary data from federal
statistics authority Destatis said, down from a 2.5 percent increase in
October.
The rate was in line with predictions of analysts surveyed by data company
Factset.
Measured using the ECB’s preferred yardstick, the Harmonised Index of
Consumer Prices (HICP), inflation fell to 2.2 percent — still well above the
central bank’s target.
The slowdown in price rises was due to a sharp drop in food product
inflation from 1.9 percent to 1.4 percent.
But the rate remained comparatively high overall because of a rise in
gasoline prices in Germany.
ING Diba economist Carsten Brzeski said that, while crude oil prices have
fallen since the summer, gasoline prices are up some five percent — mostly
because a dry summer and low river levels have sparked logistical problems.
He predicted, however, that “once lower oil prices finally reach German
households, headline inflation should fall back under the two-percent-mark in
the first months of 2019”.
The inflation data will feed the debate in Germany where many would like
to see the ECB accelerate the exit from its massive monetary stimulus
programme by year’s end.
After more than three years the Frankfurt institution plans to halt its
mass purchases of government and corporate bonds, known as quantitative
easing (QE), designed to pump cash through the financial system and into the
hands of firms and households.
Brzeski said that given uncertain growth prospects and low underlying
inflationary pressure in the eurozone, “the ECB will be happy that the
December meeting is not too far away and that it can bring net QE purchases
to an end before discussions about an extension could flare up again.”
BSS/AFP/HR/0955