Inflation Slowed Less Than First Projected in Germany Last Month on Energy
Inflation in Germany, Europe’s largest economy, slowed less than initially estimated in August as higher fuel prices countered a drop in gas costs.
The inflation rate, calculated using a harmonized European Union method, fell to 1 percent from 1.2 percent in July, the Federal Statistics Office in Wiesbaden said today. That’s above an initial estimate of 0.9 percent published on Aug. 27. In the month, consumer prices rose 0.1 percent.
Crude oil prices have declined 8.3 percent over the past month, easing pressure on inflation as the global economic recovery cools. With governments across Europe stepping up budget-consolidation efforts to cut deficits, companies may struggle to pass on higher costs. Bundesbank President Axel Weber said in a Bloomberg interview on Aug. 19 that the current growth “momentum is not sustainable.”
“There are no price pressures on the horizon,” said Michael Holstein, an economist at DZ Bank AG in Frankfurt. “Slowing growth both in Germany and globally will limit price gains. There’s no pressure on the European Central Bank to act.”
The ECB, which aims to keep inflation in the 16-nation euro region just below 2 percent, on Sept. 2 kept its key interest rate at a record low of 1 percent. The central bank that day predicted inflation to average about 1.6 percent this year and around 1.7 percent in 2011.
Germany’s statistics office said lower gas costs damped inflation while heating oil and diesel fuel were more expensive from a year earlier. Consumer prices excluding energy costs increased 0.8 percent from a year earlier and 0.1 percent compared with the previous month, the statistics office said.
To contact the reporters on this story: Christian Vits in Frankfurt at cvits@bloomberg.net
Rate These Stories
Rate this Page