German Inflation Probably Accelerated for a Second MonthStefan Riecher
German inflation probably accelerated for a second month in June after falling to the lowest level since 2010 in April.
The consumer price index in Europe’s largest economy, calculated using a harmonized European Union method, rose 1.8 percent from a year ago, compared with 1.6 percent in May, according to the median of 24 estimates in a Bloomberg News survey. Prices probably climbed 0.1 percent on the month, the survey shows. German states are scheduled to report inflation data throughout today before the Federal Statistics Office in Wiesbaden publishes national figures at 2 p.m.
“A slight increase in the inflation rate is no reason for concern at the moment,” said Jens Kramer, an economist at NordLB in Hanover. “It is still under 2 percent and we are convinced it will stay there for the months to come.”
The Bundesbank forecasts German inflation will average 1.6 percent this year and 1.5 percent in 2014.
Inflation in the euro area accelerated to 1.4 percent in May from 1.2 percent the previous month, the EU’s statistics office in Luxembourg said June 14. Data for June will be published on July 2. The European Central Bank this month cut its 2013 inflation forecast for the region to 1.4 percent from 1.6 percent and left the 2014 estimate unchanged at 1.3 percent.
The ECB on June 6 kept its benchmark interest rate unchanged at a record low of 0.5 percent as the 17-member currency bloc tries to emerge from six quarters of contraction, its longest-ever recession. The Bundesbank on June 7 reduced its 2013 growth projection for Germany to 0.3 percent from the 0.4 percent predicted in December, citing a worse-than-expected first quarter and warning that the still-unsolved sovereign debt crisis poses risks to the recovery.
ECB policy makers including President Mario Draghi said this week that an end to the accommodative monetary stance is distant and that the Frankfurt-based central bank stands ready to act if economic conditions worsen.